Exports of medical devices have great potential to help the textile and apparel industry recover, which was slumped during the COVID-19 pandemic. However, this potential has not been maximized.
The Ministry of Industry noted that the textile and apparel industry growth was minus 8.8% on an annual basis (YoY) in 2020. In fact, this sector continued to grow positively in the 2017-2019 range. In 2017, the growth was recorded at 3.83%. Then, it rose to 8.73% in 2018 and to 15.35% in 2019.
One of the causes of the contraction in the past year was declining demand due to changes in public consumption patterns. In the records of the Central Statistics Agency (BPS) in June 2020, public consumption for health increased by 73.3% and foodstuffs by 65.8% compared to before the pandemic. On the other hand, other needs tend to decline.
In the run-up to last year's Eid, for example, the managers of the Beringharjo Market in Yogyakarta and the Tanah Abang Market in Jakarta stated that sales of apparel had decreased.
Secretary General of the Association of Indonesian Fiber and Filament Yarn Producers (APSyFI) Redma Wirawasta, on May 20, 2020, also stated that sales of yarn before Eid were less than 5% of the normal period.
On the other hand, exports of the textile and apparel industry were recorded at minus 17% (YoY) in 2020. One thing shows that overseas markets are receding. The impact of the decline in the performance of this sector was the reduction in the number of workers by 13% (YoY) last year.
However, the textile and apparel industry still has the opportunity to rise. One of them is by utilizing the export of medical devices such as personal protective equipment (PPE) and masks which are part of this industrial product.
The potential from exports is because the national production capacity is greater than domestic needs. This was also conveyed by Minister of Industry Agus Gumiwang Kartasasmita on February 24, 2021.
Based on data from the Ministry of Industry's Medical Device Monitoring Dashboard (DMA), PPE (coverall-medical) production capacity is recorded at 39.6 million pieces per month or 356.4 million per year.
The production capacity for surgical clothes or surgical gowns is 24.9 million pieces per month or 224.4 million pieces per year. Then, medical masks reached 405.9 million pieces per month or 3.7 billion per year. Meanwhile, there are 360 thousand pieces of N95 masks per month or 3.2 million pieces per year.
The projection of the national need for handling the Covid-19 pandemic until the end of 2021, based on DMA data, is recorded to be smaller. For PPE of 14.9 million pieces, surgical clothing 7.5 million pieces, and surgical masks 176.6 million pieces. Only N95 masks whose needs exceed production capacity, which is 11.5 million pieces.
Thus, Indonesia is estimated to have a surplus of 341.5 million pieces of PPE, 216.8 million pieces of surgical clothing, and 3.4 billion surgical masks by the end of 2021. However, for N95 masks there will be a deficit of 8.3 million pieces.
Of the surplus, the potential export value of Indonesian medical devices reached US $ 4.54 billion. The details, PPE of US $ 3.16 billion, surgical clothing US $ 618.03 million, and surgical masks of US $ 764.69 million.
The calculation is taken with the assumption that the price of PPE is US $ 9.25 per piece, surgical clothes US $ 2.85 per piece, and surgical masks US $ 0.22 per piece.
The problem is, Indonesia is still unable to optimize this potential. Throughout 2020, the export value of new medical devices was US $ 197.6 million. The details, PPE US $ 2.47 million, surgical clothing US $ 20.29 million, different masks US $ 75.19 million, and N95 respirator masks US $ 74.09 million.
Then, exports of nonwoven meltblown made from artificial filaments as raw material for masks reached US $ 16.97 million. Meanwhile, exports of meltblown other than artificial filaments reached US $ 8.6 million.
The export value has indeed increased significantly compared to 2019 which amounted to US $ 49.6 million. However, this value is still smaller than the estimated export potential.
The Director of the Textile, Leather and Footwear Industry of the Ministry of Industry, Elis Masitoh, acknowledged the problem. According to Elis, exports are not yet optimal because the demand for medical devices from abroad is still minimal.
In fact, Elis believes that domestic production capacity will be able to exceed the current amount if demand increases. "The medical equipment industry is ready to support and all out for production to meet this demand," said Elis.
Secretary General of the Indonesian Textile Association (API) Rizal Tanzil Rakhman also expressed the same thing. According to him, the demand for exports of masks and PPE is still limited.
Rizal stated this was because Indonesia was unable to compete with other exporters of masks and PPE. For example, China is recorded as being able to export more than 220 billion face masks with a value of 340 million yuan or the equivalent of US $ 52.6 billion in 2020. That number is equivalent to 40 masks for every person in the world.
In addition, China exported 2.3 billion PPE in the same year. The export value of PPE from the Bamboo Curtain country is around 100 million yuan, or the equivalent of US $ 15.2 billion. "PPE and mask producers (from other countries) also have a large share," said Rizal. In order to encourage the export of national medical devices, Rizal assessed that the government needs to encourage trade promotion by Indonesian trade attaches in various countries.
Throughout 2020, the performance of most of the trade attaches and the Indonesian Trade Promotion Center (ITPC) was still not very good in the records of the Ministry of Trade.
Only 11 out of 33 countries posted green report cards, including China (15.59%), United States (4.58%), Netherlands (0.01%), Switzerland (223.76%), Germany (2.16 %), Australia (14.52%), Belgium (15.05%), Brazil (1.25%), Egypt (4.33%), Russia (12.73%), and Chile (14.28% ).
"Most probably, a trade promotion with our trade attachés in other countries. That's what can be done now, "said Rizal.
