JAKARTA - Management of Indonesian fabric and textile manufacturers, PT Pan Brothers Tbk (PBRX) explains how fluctuation between the Indonesian rupiah and US dollar affects their business.
Fitri R. Hartono, Director of Pan Brothers explains that sales with the buyers occur in US dollar. Leaving factors such as manufacturing costs and labor costs at risk or beneficial as the currencies fluctuate.
Furthermore, she explains that negotiations with the buyers occur in the earlier part of the year. So, "We have to forecast and anticipate the exchange rate. If the rupiah strengthens more, we cannot make the price higher."
This year, at the company's public expose, after the company’s third quarter financial results were released to Indonesia Stock Exchange (IDX), Fitri Hartono revealed that depreciation of the rupiah benefited the company in terms of cost of manufacturing.
"Rupiah has been depreciating since January through November 2015, it has been increasing more than 20%. We can say that we profit from cost of manufacturing from exchange rate because rupiah depreciated. We have negotiated with the buyer, for example the tailoring cost in dollar, but in reality rupiah has weakened," she added. (LK/CH)