Sixteen companies in the leather, textiles and food and beverages industries are expected to ease unemployment pressures throughout West and Central Java after investing a combined Rp 18.9 trillion ($1.3 billion) in the region.
The provinces are among the worst hit by layoffs as many manufacturers struggled with weakening domestic markets and export demand while costs rise in line with the declining rupiah.
The companies have spent Rp 11.4 trillion of the planned investment in building plants and have hired 74,000 workers in the first nine months this year, and are expected to reach their full capacity in the next four years Franky Sibarani, the chairman of Investment Coordinating Board, said on Monday.
"This shows that the labor intensive industry is continue to grow and create quite big number of jobs," Franky said.
The government has introduced a number of tax exemptions and expedited permits to boost the labor intensive industry as part of its effort to boost Indonesia's slowing economy.
Among the sixteen companies are Adis Dimension Footwear, the manufacturer for Nike, and the country's largest textile maker Sri RejekiIsman.
Other companies include footwear makers Feng Tay Indonesia Enterprises, Parkland World Indonesia, SelaluCinta Indonesia, and Seng Dam Jaya Abadi; textile manufacturers Jaya Perkasa Textile, Rayon UtamaMakmur, Nesia Pan Pacific Clothing, Eco Smart Garment Indonesia, Delta Merlin Dunia Textile, Delta Merlin Sandang Textile, Apparel One Indonesia and Jaya Perkasa Textile; as well as a snack maker Kaldu Sari Nabati Indonesia.
The Confederation of Indonesian Workers’ Union, or KSPSI, reported last week that 62,321 workers have lost their jobs since the beginning of this year as weak domestic and global market forces companies to reduce their production.