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Home arrow Latest News arrow Export-Oriented, Textile and Footwear Industry Contributes 19 Billion US Dollars

Export-Oriented, Textile and Footwear Industry Contributes 19 Billion US Dollars PDF Print E-mail
Written by Maizer   
Tuesday, 22 October 2019

The textile, leather and footwear industry is one of the country's significant foreign exchange contributors, one of which is through the achievementexport value in 2018 of USD18.96 billion or contributing up to 10.52% of total national exports. In addition, the sector which is classified as labor intensive, has absorbed a workforce of 4.65 million people.


"The textile, leather and footwear industry is the oldest sector in Indonesia, which has a strong structure from upstream to downstream, and its products contribute number three of all our export commodities," Secretary General of the Ministry of Industry, Achmad Sigit Dwiwahjono at the opening Textile, Leather and Footwear Exhibition in 2019 in Jakarta.


This potential has made the Ministry of Industry prioritize the development of competitiveness in the textile, leather and footwear industries. Moreover, based on the Making Indonesia 4.0 road map, the textile and clothing industry was chosen as a pioneer sector in the application of industry 4.0 in the country.


Secretary General of the Ministry of Industry said that the government is currently focusing on spurring exports from the manufacturing industry sector. This is to strengthen the structure of the national economy. "We currently have an upstream industry that produces polyester and rayon, which can support the needs of the textile industry's raw materials. This can optimize productivity and become more competitive, "he said.


In order to boost the competitiveness of the domestic textile, leather and footwear industries, the Ministry of Industry has also sought to prepare competent human resources. For example through the launch of vocational education activities that link and match between the Vocational High School (SMK) with industry and the 3 in 1 Education and Training program.


"In addition, along with the implementation of Industry 4.0, we also encourage our industry players to be able to take advantage of modern technology. Because with the restructuring of machinery and equipment, production can become more efficient, "he explained.


In addition, in an effort to expand market access to the global arena, the Ministry of Industry has facilitated a number of domestic industry players to take part in exhibitions at both national and international scale. "So, participation in exhibition activities that are technical and massive, also needs to be supported by all relevant stakeholders," he said.


For example, the Textile, Leather and Footwear Exhibition in 2019 organized by the Directorate General of Chemical, Pharmaceutical and Textile Industries (IKFT) at the Industrial Exhibition Plaza, Lobby of the Ministry of Industry, Jakarta succeeded in cooperating with 48 companies to appear in activities that took place on the 22- October 25, 2019.


The participants included the 21 textile and textile product industries, the casual footwear industry, safety shoes and sports shoes (8 companies), the leather goods industry (bags, jackets, gloves, and associations) of 14 companies, and other industries such as carpet manufacturers, spring beds, household accessories products, and supporting companies (5 companies).


"All exhibitors of this production are aimed at the export market and the domestic market whose quality is no less competitive with imported brand products. Therefore, the products exhibited can be imported substitutes, "he explained.


Sigit also said that his party would facilitate domestic textile, leather and footwear industry players to take part in an international scale exhibition event, the Hannover Messe 2020 in Germany which carries the tagline "Everything Indonesia". Indonesia has been formally chosen as the Hannover Messe 2020 country partner.


"Because Indonesia is considered an emerging economic powerhouse that has power in the manufacturing and energy sectors. This event is the largest international industrial technology exhibition in the world which will be attended by 6500 exhibitors and attended by more than 200 thousand visitors every year, "he said.


Participation in the 2020 Hannover Messe is believed to be able to open the door for the acceleration of technology adoption in the textile, leather and footwear industries as an implementation of the "Making Indonesia 4.0" program. In addition, investment agreements and market development are expected to occur, considering that Europe is the world's largest importer of apparel and footwear products from Indonesia.


"Therefore, the moment of the Hannover Messe 2020 must be utilized as well as possible by the national apparel and footwear industry and at the same time introduce its supply capabilities," Sigit added.


Increased production and exports


Previously, the Director of the Textile, Leather and Footwear Industry of the Ministry of Industry, Muhdori, emphasized that his side was still optimistic about increasing production and exports of national footwear products. This is in line with the expansion and new investment coming in.


"There are seven investors who want to enter," he said. They are, among others, from Korea which will increase its production capacity in Sukabumi, Jepara and Bumiayu. "They used to produce sports shoes for famous brands such as Nike, Adidas, and Puma," he said.


With this investment, Muhdori believes the performance of the domestic footwear industry next year will be even better. "We believe growth will return positively, both in terms of production and exports in 2020," he said.


Muhdori asserted, Indonesia is still the world's sixth exporter for footwear, which is increasingly competing with China and Vietnam. Indonesia has a market share of up to 2.8% in the global arena, and its largest market is in the Americas and Europe.


Indonesia also ranks fourth among footwear manufacturers with 1.272 million pairs of shoes or 5.3% of world production. In addition, the average price of Indonesian footwear exports still ranks fifth in the world with a value of USD 16.70, which shows Indonesia produces footwear with competitive prices and good quality.


"We are still optimistic that the target of businesses to spur exports by up to 10 percent by the end of this year can be realized. Moreover, there is potential for winter and holidays, because there is usually a surge in export demand with new models, "Muhdori said.


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