Jakarta - The global economic meltdown has forced a number of Indonesian labour-intensive industries to lay off more than 12,000 workers, media reports said Friday.

Businessmen claimed that the global financial crash has started affecting the export sector in November and many exported products were rejected by buyer countries, which could force many more companies to stop production.

Riau Andalan Pulp and Paper (RAPP), announced Thursday that it would dismiss 1,000 workers and temporarily lay off another 1,000, in a move to help stop the company from failing.

"Timber supplies are inadequate to meet production needs and this has now been worsened by the global financial slowdown," said RAPP director Rudi Fajar.

"Besides low demand from overseas buyers, the sale price has also dropped significantly," The Jakarta Post quoted Fajar as saying, adding that the company had also severed the working contracts of 25 of the 54 expatriates working there.

A total of 12,600 manufacture labourers also face dismissal as industries across Java and Kalimantan provinces are planning layoffs, reported Indonesian daily Kompas newspaper.

Manpower and Transmigration Minister Erman Suparno revealed recently that his office has allocated 1.4 billion rupiah (116,600 dollars) in the state budget to cushion the impact of possible mass unemployment as a result of the global financial crisis.

Next year, the budget would be increased to 1.6 billion rupiah.

An estimated 2.5 million workers in Indonesia's garment and textile factories may lose their jobs in the near future, while other labour-intensive industries that rely on the export market face similar prospects, which could fuel the already high unemployment rate in the country, according to businessmen.