Domestic garment and textile industry players are reducing production by 30% - 50%, due to the rise of imported products. As a result, demand has decreased so many employees are being laid off. The chairman of the Indonesian Filament Fiber and Yarn Association, Redma Gita Wirawasta, explained that the decline in demand had occurred in the last month before the increase in fuel prices. This is due to the tap of imported products opened by the Ministry of Trade. "The import faucet is opened by the Ministry of Trade so that imports are more, even some companies have stopped production lines by around 30 percent," said Redma, Monday (12/9/2022).
Textile and garment orders from abroad also decreased due to inflation that occurred in many countries. Meanwhile, if you expect the domestic market to be difficult to compete with imported products, which are much cheaper.
"From threads, fabrics, garments, there are still massive imports, especially fabrics and garments," said Redma.
He explained that many general importer permits were issued by the Ministry of Trade from last year for the supply of small and medium industries (IKM). Where for import permits for imported fabric products issued until December 2021 yesterday reached 1 billion meters in length, which is equivalent to 200 - 250 thousand tons.
Redma said the decline in production lines was carried out by all industry players from upstream to downstream. Where garments cut production by 50% and upstream by 20% - 30%. Make a lot of employees laid off.
"So most companies lay off employees, if they haven't been laid off yet," he said, although he had not yet calculated the number.
With the condition of increasing subsidized fuel prices, the production costs will increase, at least 20% - 30% of the logistics component. However, entrepreneurs cannot raise prices because they cannot compete with imported products.
"We are worried that many imported goods will enter the market, demand (domestic products) will weaken because the market is shrinking, but the supply of goods will increase due to imports. We are stuck here and there," he said.