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Java region attracts textile investors

Central Java is emerging as an attractive top investment destination for textiles and textile products in Indonesia. This region has attractive factors going for it like availability of labor, a market, and a developed network for distributing textile products. In addition to Central Java, other provinces which are top ranking textile investment destinations in Indonesia are West Java and East Java.

The main investment in the textile sector goes to industrial processing and spinning of textile fibers, followed by the apparel industry, which is followed by the textile industry. Japan is a major investor with 93 projects capable of absorbing 11,906 workers. Indonesia has a well-established, vertically integrated textile industry that is involved in almost every sector of the textile supply chain — from the production of manmade fibers, particularly polyester, nylon and rayon; man-made and cotton yarn spinning; and weaving and knitting; to dyeing, printing and finishing; and apparel and also textile product manufacturing. Most of these companies are located in the region of Java.

However, the Indonesian textile industry is trying to reduce its dependence on imported textile machinery and is being encouraged instead to purchase domestically produced machinery. Tax incentives are being offered to Indonesian textile machinery producers as well as stimulus funds to textile plant owners to upgrade their machinery.