On Friday, 2 September 2023 the Indonesian Textile Association (API) held a CEO Gathering at The Ritz-Carlton Jakarta to discuss international and domestic challenges to textiles and textile products (TPT) in the political year. In the event which was attended by the CEOs of textile companies in Indonesia, the idea emerged that the textile industry must be more united in triggering improvements and enhancements to the national industry in the midst of post-Covid-19 pandemic conditions. It is reported that the performance of the textile industry has experienced a slowdown since the third quarter of 2022 until it becomes negative in 2023, due to global economic conditions and high Chinese stocks which have caused legal and illegal imported goods to flood the domestic market. Utilization from upstream to downstream of the textile industry is necessary and followed by employee rationalization.
Even so, the trade balance is still considered stable so that export opportunities are considered to be able to revive, and with the ASEAN Summit it is hoped that it can improve trade policies that are still less than perfect.
It is stated that to maximize the potential contribution of the textile industry to the national economy it is necessary to:
- Fairness Competition in the domestic market to increase production utilization and encourage investment through Trade Remedies, Handling Illegal Imports, Commodity Balance, Product Quality Standards (SNI), Domestic Content Levels (TKDN)
- Increasing Competitiveness and Strengthening Industrial Integration to penetrate export markets by intensively using domestic raw materials, R&D, green products and industry, labor productivity and cost efficiency (energy and logistics)
There needs to be a conducive synergy between the upstream and downstream sectors to increase added value thereby strengthening domestic textile commodities on the international stage.
So far, many issues have emerged regarding the performance of the textile industry, which is always declining, because efficiency strategies through layoffs make this an unavoidable action.
The decline in the textile industry was caused by the Covid-19 pandemic and the war between Russia and Ukraine which affected government dynamics and even globally, causing export demand and market expansion to decline. With the ongoing trade war between China and America, there is a need for communication between the government and business actors to improve the ecosystem of the major economies. Even the smallest problem has the potential to harm the national economy as a whole because clothing is one of the basic needs.
However, in this gathering it was also stated that there is optimism in restoring the condition of the textile industry in Indonesia. As the political year enters, there will be potential for improvement in the textile industry.
Based on a statement by the Deputy Chair of the DPR Legislative Body, Drs. M. Nurdin, to improve the Indonesian textile industry ecosystem, there needs to be communication between stakeholders, including lawmakers, namely the DPR, DPD, or Government, expert groups consisting of experts and academics, business actors, the public, and the mass media.
The textile industry has quite an urgent alarm because it plays an important role in investment which can open up many jobs and absorb a lot of labor, contribute significantly to state income and help move the wheels of the national economy.
In fact, in the field, many textile industry business players are worried about regulatory policies related to textile commodities which are considered not yet firm. Currently, statutory provisions governing the fulfillment of basic needs in the form of food and shelter already exist, but there are no regulatory provisions that specifically regulate them. Responding to these concerns, the DPR legislative body itself is trying to monitor and review the law. In this CEO Gathering event, it was stated that they were holding a Public Hearing Meeting (RPDU) with related stakeholders. They also said that they had carried out their third working visit covering West Java, Central Java and South Sulawesi.
TPT industry players admit that they are very worried about the many threats during and after the pandemic, namely that foreign products, both legal and illegal, are flooding the market, disrupting business activities, production costs, especially energy, are still high and do not support the operational activities of industry players, adding that After the pandemic, financial institutions, both banking and non-banking, have increasingly tightened their financial lending due to the existing situation and conditions.