The Indonesian textile industry is facing weak sales and rising production costs.Rising costs, especially in electricity, have impacted the local textile industry, which also faced pressures from rupiah depreciation as half of its raw materials are imported.

Indonesia’s economy decelerated to 4.71 per cent year-on-year in the first quarter, its slowest pace in nearly six years, partly due to lower domestic consumption, while recently rupiah and stock prices weakened amid growing concern that the surge in inflation last month would further damage the country’s economic outlook.

West Java is the largest contributor to national textile production with 49 per cent while Jakarta and Banten contribute 16 per cent, Central and East Java 14 per cent each and the remaining three per cent comes from other regions.

To compete with imported products, the industry is looking for a way to decrease electricity costs. It also wants government spending, especially for infrastructure and villages, to be accelerated for disbursement.

Robust economic growth and rising purchasing power are making Indonesia an attractive market for textiles and clothing. Both local and foreign companies are vying for market share. However rising costs are giving domestic producers a hard time as they try to fend off overseas competition.