Chairman of the Indonesian Textile Association (API) Jemmy Kartiwa Sastraatmadja, revealed that the textile and textile products (TPT) industry was not doing well. However, there are several challenges facing the textile industry. Jemmy said, in the first and second quarters of 2023, the biggest obstacles will occur due to reduced export demand. This is because the majority of API members in the garment manufacturing scale are export-oriented, so they are greatly influenced by the international trade situation. Meanwhile, in the domestic arena, TPT is dealing directly with the rise of imported products, both legal and illegal.
"Thrifting is also very disturbing, and has started to be handled by law enforcement," said Jemmy at the CEO Gathering API event in Jakarta, Saturday (2/9).
The problem arose during a question-and-answer discussion between the Chairman of API and Small and Medium Enterprises (SMEs) regarding the potential for a lack of materials or clothes to sell if thrifting was removed.
However, his party emphasized that IKM garment products are very capable of competing both in terms of price and quality with imported products.
A number of challenges faced by the textile industry in the country, namely legal and illegal imported products flooded the domestic market.
Data shows that the increase in imports in volume is 2.16 million tons, in value worth USD 10 billion in 2022, the rate of increase in imports of TPT products from 2010 to 2022 is 40 percent.
He noted that the decline in TPT exports occurred from 2022 to March 2023 with a volume decline rate of around minus 10.78 percent.
Furthermore, the problems experienced by the TPT industry are related to the utilization of machinery in TPT manufacture from upstream to downstream, down to the lowest level, namely around 65 percent.
"The average utilization of machines in textile factories and textile products from upstream to downstream has decreased by around 40 percent. The number of machines and production lines has decreased drastically," he said.
Then, the next challenge is a wave of employee rationalization, from 2022 to early 2023, numbering around 70,000 people.
Not only that, the next challenge, namely products in the form of raw materials to downstream, flooding the domestic market comes from China with a market share of 48 percent, followed by Brazil, Australia, America with around 5 - 6 percent.
Another challenge still comes from China, namely apparel products flooding the domestic market in volume coming from China at 66 percent, followed by Bangladesh 8 percent and Vietnam 6 percent.
"The data above shows the need for serious attention from the Government to control the rate of imports of textile products, from raw materials to finished garments, so that there is a balance in the capacity of local products," he concluded.
