The Ministry of Industry considers that the fall of labor-intensive industries such as footwear and textiles which led to layoffs or mass layoffs was triggered by low productivity. This was motivated by the use of old machines. The Director General of the Chemical, Pharmaceutical and Textile Industries (IKFT) of the Ministry of Industry, Ignatius Warsito, said that on average, factories in the national labor-intensive industries still use old machines. With machines that are technologically behind, according to Warsito, the textile industry players in the country cannot maximize innovation, so that product models do not keep up with the times.

According to him, it is not surprising that domestic industrial products are inferior in the global market to products from various countries that have a high level of innovation in labor-intensive sectors.

"That machine has also been around for a long time and orders are dropping, so it's getting lower," said Warsito on Monday (12/6/2023).

In this case, the Diponegoro University Chemical Engineering alumni who has worked at the Ministry of Industry since 1990 said that the ministry is currently preparing incentives for labor-intensive industries. Not only that, the Ministry of Industry is trying to extend the engine restructuring program for next year.

"With the new machines, you can make new models," added Warsito.

Previously, in 2021 and 2022, the Ministry of Industry (Kemenperin) did indeed hold a machine/equipment restructuring program that focused on the fabric perfecting and fabric printing industries which was participated by 27 companies. This year, the Ministry of Industry is again holding this program and targeting the participation of 13 companies with a total budget of IDR 4.7 billion.

This program aims to stimulate the use of equipment or machines that are more modern, efficient and environmentally friendly so as to increase competitiveness, in accordance with the "Making Indonesia 4.0" roadmap.

With this budget, a discounted price of 10 percent of the total investment in imported machinery/equipment will be made, or 25 percent for domestically produced machines/equipment.

PT Tuntex Garment Indonesia, a textile factory that produces the Puma brand, was forced to lay off 1,163 workers because they were unable to pay wages. This adds to the long record of termination of employment (PHK) in the textile and textile product (TPT) industry.

In 2022, citing data from the Indonesian Employers' Association (Apindo), the total garment factory workers who lost their jobs until early November 2022 reached 79,316 people from 111 companies.