Based on a study compiled by the IEB Institute, textiles and textile products (TPT) are one of the sectors that have experienced the deepest blow, both in the domestic market and in the global market.
The textile sector plays an important role in the Indonesian economy through its contribution to gross domestic product (GDP), exports and employment. The contribution of the Indonesian textile sector to the total national GDP in 2020 is 1.21 percent (from 1.26 percent in 2019), while the contribution of textile exports to total exports decreases to 6.12 percent in 2020 (from 7.15 percent in 2019). In terms of the total workforce (TK) the TPT sector is in the range of three million workers which covers about two percent to three percent of the total Indonesian TK.
From the perspective of textile exports, the textile industry is under pressure from three sides, both in terms of demand, supply and distribution, one of which is the scarcity of containers which has pushed up prices.
Throughout 2020, TPT exports were worth 10.55 billion US dollars, down (minus 17.7 percent yoy) from 2019. The decline occurred in various products, namely the yarn segment (minus 27.3 percent yoy), fabrics (minus 15.7 percent yoy). and apparel (minus 15.1 percent yoy).
The largest contribution to the decline came from the decline in apparel, which accounted for 66 percent of Indonesia's total textile exports. At least the pressure on the textile industry will still occur until the first half of 2021.
TPT's performance was slightly helped by the demand for PPE for the needs of handling Covid 19. However, the demand for PPE was not large enough to cover the decline in sales of TPT products as a whole.
From export sales data, exports per year for each individual exporter, namely the value of export sales per year, it can be seen that exporters show a different survival mode from each exporter.
Large class exporters or corporations are supported by a strong network in the export market. As a result, a number of middle-class exporters experienced a significant decline in sales and in turn caused them to downgrade.
Small-scale textile exporters felt the most impact, so some exporters had to leave the export market. On the other hand, there are a number of adaptive exporters who are able to respond to the needs of textile products during the pandemic, so that their export sales are expansive.
One of them is CV Men Handsome as of August 2021, this batik export-oriented SME from Solo is able to send batik cloth abroad worth US$467,000, an increase compared to the previous period with an export value of US$463,000. Over the past three years, the majority of the destination countries for these SMEs from Solo have been Canada and the United States.
The white grains that appear on the batik cloth that comes from the process of dyeing the cloth is a characteristic that makes it attractive to foreign markets.
"Currently, those of us who are just starting or have been in business for a long time, are faced with more or less the same situation, namely the Covid-19 pandemic, so it is very important to remain optimistic and have a positive mindset that we can get through the current situation," CEO of CV Pria Handsome Andri Setyawan, Thursday (16/9).
According to him, his party took advantage of all the assistance provided by the government, such as using the SME export special assignment program (PKE) from LPEI. "This assistance really helps us in running our business, especially in the midst of a situation like this," he said.
