Textile and textile product (TPT) business actors responded to the government's plan to facilitate debt repayment or restructuring for the industrial sector. For information, the plan was put forward by Coordinating Minister for the Economy Airlangga Hartanto in a press conference on the Achievement of Economic Growth for the Third Quarter of 2022, Monday (7/11). Airlangga assessed that several industrial sectors were still vulnerable to experiencing a slowdown in performance to the point of having to lay off their employees, in line with the uncertainty of the global economy.
For this reason, the government will review in more depth each sector that is being hit by problems. One of the assistance that the government wants to provide is through credit restructuring in coordination with the Financial Services Authority (OJK).
Chairman of the Trade Division of the Indonesian Employers' Association (Apindo) Benny Soetrisno assessed that the policies planned by the government were very good for business actors. Moreover, several companies in Indonesia have problems related to obligations to financial institutions or banks.
"This policy will have an effect in the form of slowing or delaying the occurrence of layoffs," he said, Tuesday (8/11).
He said that the industrial sector that most needed ease of debt restructuring was the labor-intensive industry. This is because an industry like this absorbs a lot of manpower and on the other hand is prone to layoffs when its business performance is disrupted.
One of the labor-intensive industries is textiles and textile products (TPT). In KONTAN's record, the Indonesian Textile Association (API) once said that there were 45,000 employees in the textile industry who had been laid off since the Covid-19 pandemic.
Meanwhile, the Indonesian Fiber and Filament Yarn Producers Association (APSyFI) admitted that no workers in the upstream textile sector had been laid off. However, there are around 1,000-1,500 employees in the upstream textile industry who have been forced to be temporarily laid off due to the domino effect of problems in the downstream textile sector.
Redma Gita Wirawasta, Chair of APSyFI, said that the plan to provide easy debt payments is a pretty positive policy from the government. This policy can be a medium-term solution to help prevent a deeper fall in the textile industry.
"However, this is not enough to prevent layoffs from increasing day by day," he said, Tuesday (8/11).
He added that the current problem of the textile industry is the lack of demand for textile products from the export market, while on the other hand, the domestic market is still flooded with imported textile products. In fact, if the domestic market can be fully filled by local textile products without interference from imports, then this is believed to be able to prevent layoffs.
Based on data from the Central Statistics Agency (BPS), the volume of textile imports increased by 4.21% year on year (yoy) in the January-August 202 period to 1.50 million tons.
In detail, imports of yarn rose by 20.16% (yoy) to 222,730 tons during January-August 2022. Then, imports of fabric grew 9.15% (yoy) to 589,690 tons. Fiber imports rose 1.74% (yoy) to 567,100 tonnes. On the other hand, imports of apparel declined by 54.50% (yoy) to 22,670 tons in January-August 2022, while imports of other textile products fell 8.01% (yoy) to 99,690 tons.
Redma assessed that actually in the first and second quarters of this year, TPT imports were still very minimal due to the high freight rate and the absence of an Import Approval (PI) for the General Import Identification Number (API-U). As a result, local textile industry players are able to supply various products, including yarn and fabric.
"However, with the issuance of the PI for API-U, textile traders have started to play again and flood the domestic market with imported goods," he said.