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APSyFI: The national textile industry is headed for a trade deficit, 2018 exports grow 1% and imports grow 14% (yoy).--IKATSI: The growth of the national textile industry is still hampered by floods of imports, Indonesia needs a clothing security law.

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Home arrow Latest News arrow Textile Manufacturers Fail to Pay Debt

Textile Manufacturers Fail to Pay Debt PDF Print E-mail
Written by Maizer   
Tuesday, 23 July 2019

The Duniatex subsidiary, Delta Dunia Sandang Tekstil, which has defaulted on its debt over its syndicated loans, immediately triggered questions about whether negative conditions were sweeping the Indonesian textile industry as a whole.


Understandably, the news appeared almost simultaneously with the increasing complaints of a number of domestic textile players who claimed to have been stricken by imports of finished products.


At the same time, global trade conditions were sluggish due to the US and China trade wars, so it was feared to disrupt the export performance of the sector.


However, negative perception performance of textile sector was apparently rejected by the Chairperson of the Indonesian Textile Association (API) Ade Sudrajat.


He said Indonesia's textile industry is still in good condition and has promising export prospects this year.


Moreover, according to him, the textile and textile products (TPT) sector is still leading export sector for Indonesian government.


He also acknowledged that the current textile sector's business climate is not perfect, one of which is reflected in excessive imports of domestic textile products even though the goods have been produced in the country.


For this reason, he supports the revision of the Minister of Trade Regulation (Permendag) No.64 / 2017 concerning provisions on the Import of Textiles and Textile Products.


However, the revision is only needed in case of tightening provisions for importers of general importer identification numbers (API-U). Because so far the import provisions given to API-U have been too loose, triggering a surge in imports of finished products through a bonded logistics center (PLB).


Nevertheless, he believes that Indonesia's TPT export performance is still on the right track and prospective. The export value of TPT is targeted to grow to US $ 14.6 billion this year from US $ 13.9 billion in 2018.


According to him, even though the growth target tends to be moderate, there are many opportunities that can be achieved, especially exports to the US which is now being hit by a trade war with China.


He also believes, with the help of accelerating bilateral trade agreements that have been established by Indonesia, the prospect of growth in the value of textile exports can continue to increase.


Especially, with the comprehensive economic cooperation between the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) and the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) which is currently in the finalization stage.


Reflecting on the real condition of the TPT industry, he asked all parties to carefully assess this case as something that describes the character of an individual company and is not a portrait of the textile industry.


"In addition, reflecting on the events that hit one of the major textile companies in Indonesia, we appealed to all public listed or not open textile companies to implement a good corporate governance (GCG) system," he said.


The reason is, he considered the case that befell Duniatex's subsidiary Delta Dunia Sandang Tekstil, has a number of anomalies that need to be observed, such as the S & P rating that changes from BB-CCC to within 4 months.


Deputy President Director of PT. Sri Rejeki Isman Tbk. Iwan Kurniawan Lukminto, agreed to Ade's statement. According to him, the textile industry conditions are currently on the right track and will continue to grow.


"In general, our sales and exports are still increasing, especially towards the US," he explained.


Deputy Managing Director of PT Pan Brothers Tbk. Anne Patricia Sutanto also believes that the export performance and the corporate industry are still growing very significantly.


He said his company targets export growth of up to 15% on an annual basis in 2019. In addition, he also acknowledged, with the existence of trade war between the US and China, the PBRX issuer coded company received a rise in demand from both new and old customers, especially from Uncle Sam.



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