BUSINESS: Indonesian textiles in Ireland
The opening of textile mills in Manchester, England, in the 19th century
spelled doom for the traditional garment industry in British India. From
that point on, the colonies supplied raw cotton to Lancashire county's humming
factories. Now, in a reversal of fortunes, a company from another former
European colony is coming to the aid of the Old World by setting up two textile
plants in troubled Northern Ireland.
Norfil Ltd., which is associated with Polysindo-Texmaco, Indonesia's largest
integrated textile group, plans to open a $ 68 million polyester filament
yarn plant in County Antrim next month. An affiliated $ 78 million weaving
plant -- partly using yarn made by Norfil -- is to be up and running by early
1997. Together the two operations are expected to employ 900 people.
It is tempting to view this development as part of the peace dividend in
Ulster after the separatist Sinn Fein began negotiations with the British
government. However, Norfil executives say they had planned to start production
as early as 1993 but were put off by Europe's recession.
They say Northern Ireland's relatively high labor costs will be offset by
substantial savings in import duties in the European market. Says Norfil
Director Christie Cherian: "In the late 1980s our management decided to create
a presence in Europe, the world's largest textile market." And being close
to the market will give Norfil an edge over competition from East Asia, he
says. (EC regulations allow subsidies for yarn weaving but not for spinning;
Cherian says grants and incentives for the weaving plant will defray 30 percent
of its costs.)
British analysts feel Northern Ireland must capitalize on its position as
the second-cheapest site in the European Union (after Portugal) to attract
labor-intensive industries that want to enter the European market. By setting
up offices in Taipei and Hong Kong and making frequent visits to Singapore
and Indonesia, officials of the Northern Ireland Board of Investment hope
to kickstart Ulster's economy.
South Korean companies like Daewoo have already begun operations there. Such
job-creating investments should help Ulster reduce its chronically high unemployment
rate, currently 12 percent, and boost the optimism ushered in by the peace