Investments in the textile sector are concentrated in the intermediate or midstream industries. Secretary General of the Indonesian Filament Fiber and Yarn Association (APSyFI) Redma Gita Wirawasta said the industry currently has the most opportunity for foreign investment to enter because its structure is still relatively weak. The intermediate industries consist of yarn spinning, dyeing, and printing. However, Redma views that investment in the intermediate industry is booming, driven by external factors and not the impact of government policies.
"Why is there investment in the midstream that can grow? because of world conditions, not because of government policies," he said when contacted by Bisnis, Thursday (28/10/2021).
These external factors include obstructed trade traffic, high shipping costs, and restrictions on a number of competing countries.
The hampered supply of materials from import pockets such as China creates a gap that must be filled by domestic industry players. This market gap ultimately encourages the entry of new investments.
Redma said that if you want to continue to encourage the flow of foreign investment to strengthen the structure of the domestic industry, the thing that needs to be considered is market guarantees by limiting imports of raw materials.
"This is what we have always echoed, if we inhibit imports of [raw materials], investment will definitely come in. If the market is guaranteed, investment will come," he said.
Indonesia also cannot continue to rely on the momentum of the global situation to attract investment. At a certain time, the world's trade and economic climate will change, so government policies need to be prepared as the main focus.
One of the import control instruments that industry players are waiting for is import duty for security measures (BMTP) or safeguards for garments. The preparation of the safeguards is said to have entered the final stage although it has not yet been signed. "Right now we are asking for safeguards [for garments], it is very difficult. They say it is final, but what is important is its implementation," said Redma.
