The upstream textile industry is currently facing many challenges, including the increase in world oil prices which have to raise the price of the main raw material for Polyester and the threat of imported products, both legal and unprocedural, starting to flood the domestic market again. Secretary General of the Indonesian Filament Yarn and Fiber Producers Association (APSyFI), Redma Gita Wirawasta explained, the main raw material for Polyester, namely PTA, is already at the level of USD$ 850/ton which normally is around US$ 600/ton. So, the increase is already high because PTA is derived from crude oil.
"Currently demand is still quite good, but our sales are starting to be depressed because our buyers in the domestic market are starting to experience sales difficulties following the reopening of textile imports for general importers (API-U) by the Ministry of Trade," he explained, Wednesday (8/6).
Redma said that currently the average utilization of upstream textile factories has fallen by 5 percent to 80 percent. If API-U imports continue to be opened like this, his party is again pessimistic, utilization will continue to fall.
According to Redma, the increase in raw material prices is not a problem because world prices and business actors can increase the selling price of their products. Currently the selling price has increased about 5% from the normal price.
However, for some companies this increase is still a loss because it is not proportional to the increase in the price of their raw materials. On the other hand, if the selling price is raised even higher, it will put pressure on downstream buyers because they have to compete with imported goods. So the main problem is the domestic market where APSyFI has asked the Ministry of Trade not to grant import permits for API-U.
"For IKM raw materials for the last 3 quarters, the Ministry of Trade has not given API-U permission and domestic fabric producers have proven to be able to meet the raw material needs for IKM. So please don't use the Ministry of Trade and Customs as an excuse anymore," he said.
Another challenge faced by the upstream textile industry is energy costs, which will rise because the price of coal DMO purchased by PLN is increased from US$ 70 to US$ 90 per ton. Redma said this forced PLN to increase the selling price.
"This is a policy blunder, where the government is very visible in favor of coal miners and sacrifices the manufacturing industry as a (labor-intensive) job creator," he said.
Although the performance of the Textile and Textile Products (TPT) industry in the first quarter of 2022 grew 12.45% year on year (yoy), this does not necessarily make players in this sector calm in facing the next quarter until the end of the year.