Impact Assessment

Denim Cluster SMEP Project, Swisscontact Indonesia, 2010

    Description
    In the aftermath of devastating floods in February 2007, Swisscontact sought to help a cluster of denim manufacturers in Cipulir, Indonesia, to restore and improve their competitiveness. Swisscontact assisted with machinery replacement and supported dialogue and self-organisation among market players. This has contributed to the establishment of a technical training centre, a sustainable market for flood insurance, improvements in product quality and productivity, and enhanced maintenance skills, marketing, cooperative finance and access to markets.

    Methods for info gathering
    The report is based on a questionnaire survey which included treatment and control groups for both enterprises and workers. Among the beneficiaries (treatment group), the survey covered 32 producers and 15 workers in 5 areas. Given the likelihood of spillover effects from market development activities, it was not possible to get a pure control group. However, the authors endeavoured to identify clusters where the project is unlikely to have had an impact. 10 enterprises and 10 employees were selected as a control group. In total 67, enterprises and employees were interviewed in the Cipulir area. The sample treatment and control groups for enterprises and for workers were all randomly selected.

    Summary of results
    After project support, the average sales of target enterprises grew by 23%, profitability by 25% and productivity by 26.1%. Likewise, the beneficiary enterprises developed more new products and brands than the control group. The enterprises added 188 full-time and 44 part time workers. All figures were higher than for the control group. The net real savings for target enterprises during the project cycle alone amount to US$216,562. This equals the project budget and excludes income multiplier effects and future income flows. Nominal worker's income increased by 14% from an average of US$98 to $112 per month. The report itself gives further details of impact in terms of scale, employment, income and the likelihood of autonomous replication.