The Indonesian Association of Fiber and Filament Yarn Producers (Apsyfi) revealed that the local textile and textile product (TPT) industry requires fresh investment. However, currently the investment needed is hampered by trade regulations that favor imported products.
"If you consider the growth of the textile industry, employment and foreign exchange, investment, both foreign and domestic, is very much needed, given the lack of investment in the last 5 years," explained the Secretary General of the Association of Indonesian Filament Yarn and Fiber Producers (Apsyfi), Redma Gita Wiraswasta.
Redma said that from a capacity perspective, new investment is needed for the fabric finishing and fabric manufacturing sectors, especially if the market starts to normalize.
Indeed, so far for import substitution, the textile industry can still use existing production capacity. However, according to evaluation data from Apsyfi based on the capacity and age of existing machines, to catch up with the growth in consumption of the textile industry, the fabric sector needs to increase the finishing capacity and rejuvenate fabric-making machines by around one million tons with a total investment of US $ 600 million. Meanwhile, the production of yarn and fiber is 500 thousand tons or requires an investment of around US $ 400 million in 2022.
Although fresh investment is urgently needed by the local industry, this enthusiasm for investment is still constrained by the government's commitment to guarantee the domestic market. Redma is of the opinion that the import substitution target set by the Ministry of Industry alone cannot be fully supported by the Ministry of Trade.
"So the pro-import trade policy has been hindering investment," he said.
Redma explained that the big obstacle currently happening is that the domestic market is still filled with imported goods that are sold online. Small and Medium Industry (IKM), especially garment IKM (convection) is very depressed because they are directly dealing with imported goods online. "If we look at our sales in the upstream, then downstream as of today, production has stopped about 20% from the position at the beginning of the year," said Redma.
Therefore, Redma admits that this year Apsyfi is somewhat pessimistic about the prospects for the textile business in the local area because the industry requires government commitment to guarantee the domestic market. Of course market guarantees are important for investment.
