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Indonesian textile industry is saturated, needs innovation

The domestic textile industry in Indonesia must diversify their products to remain competitive says the Indonesian Trade Chamber of Commerce, however, industry players are looking to the government to make the first move. Vice chairman of Indonesian Trade Chamber of Commerce Benny Soetrisno revealed the textile industry that produces clothing is already saturated. So, one has to move the production slot to another product.

Benny believes there needs to be support from raw materials products in the upstream industry. However, the upstream textile industry is high risk, high investment and low on returns. He feels the government needs to give incentives as well as ease investment so investors are attracted. At present, the industry operating in Indonesia has been integrated with classification in three areas. Firstly, the upstream sector largely produces fibre products. Secondly, the intermediate sector, company’s production processes include spinning, knitting, weaving, dyeing, printing and finishing. Thirdly, the downstream sector is garment factories and other textile products.

Ade Sudrajat, Chair, Indonesian Textile Association (API) says before diversification, internal problems of state rules, energy, human resource capability and logistics capability must be addressed. As product diversification can work alone if internal and external problems are addressed. The need of the hour is bilateral cooperation with the US and the EU to expand local textile exports enable Indonesia to be able to successfully compete with Vietnam and Bangladesh whose textile industry is growing at a rapid pace. Unhappy with exports growth Sudrajat says this year export should has seen double digit growth but with current situation it an at most grow 4 per cent.

The Ministry of Industry estimates textile industry exports will grow 11 per cent per year. For 2018, it’s pegged at $13, 5 billion and in 2017 it was $12.09 billion.