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Indonesia needs to focus on trade promotions to boost falling T&A exports

 

Indonesia needs to focus on trade promotions to boost falling TACOVID-19 changed public consumption patterns across the world last year. As per Indonesia’s industry ministry, consumption of textile and apparel products (T&A) declined to -8.8 per cent on an annual basis during the year. And as Redma Wirawasta, Secretary General, Association of Indonesian Fiber and Filament Yarn Producers (APSyFI) says, sale of yarn declined to less than 5 per cent before Eid. T&A exports declined to -17 per cent Y-o-Y in 2020, reports Indo Textiles. This further led to a 13 per cent decline in employment rates last year.

PPEs can lead exports

However, the Indonesian textile and apparel industry has the ability to rise from this low by encouraging PPE exports, points outIndonesia needs to focus on trade promotions to boost falling TA exports Agus Gumiwang, Minister of Industry. Ministry of Industry's Medical Device Monitoring Dashboard (DMA) informs, Indonesia has a capacity to manufacture 39.6 million pieces of PPEs per month or 356.4 million per year. The country can produce 24.9 million pieces of surgical gowns per month or 224.4 million pieces per year. Its capacity to produce medical masks has reached 405.9 million pieces per month or 3.7 billion per year. It currently produces 360,000 pieces of N95 masks per month or 3.2 million pieces per year.

Against this, Indonesia requires only 14.9 million pieces of PPE, 7.5 million pieces of surgical clothes and 176.6 million pieces of surgical masks. Hence, the country has a surplus of 341.5 million pieces of PPE, 216.8 million pieces of surgical clothing, and 3.4 billion surgical masks by the end of 2021. It can export medical devices worth $ 4.54 billion. Of this, it can export PPE worth $3.16 billion, surgical clothing worth $618.03 million, and surgical masks worth $764.69 million.

Demand to boost domestic production capacity

However, Indonesia has been unable to fully optimize its export potential. In 2020, it exported new medical devices worth only $197.6 million. This included PPEs worth $2.47 million, surgical clothing worth $20.29 million, different masks worth $75.19 million, and N95 respirator masks worth $74.09 million. Elis Masitoh, Director-Textile, Leather and Footwear Industry, Ministry of Industry, attributes this to lack of demand for medical devices from abroad. He believes, an increase in demand can boost domestic production capacity of medical devices. Rizal Tanzil Rakhman, Secretary General, Indonesian Textile Association (API) opines, lack of demand for masks and PPE made in Indonesia is due to its inability to compete with other exporters. He advises the government to encourage trade promotion by Indonesian trade ambassadors in various countries.

As per Ministry of Trade, in 2020 most of Indonesia’s trade attaches and even the Indonesian Trade Promotion Center (ITPC) underperformed in exports. Exports to only 11 out of 33 countries increased. This included China, with an increase of 15.59 per cent, United States, Netherlands, Switzerland, Germany, Australia, Belgium, Brazil, Egypt, Russia and Chile The country, therefore, needs to promote trade with ambassadors in other countries, emphasizes Rizal.

 
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