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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 Sri Mulyani Describes Problems in the Textile Industry Other Than Imports


				
			
			
Sri Mulyani Describes Problems in the Textile Industry Other Than Imports PDF Print E-mail
Written by Maizer   
Thursday, 21 November 2019
Minister of Finance Sri Mulyani said the problem of the national textile and textile product (TPT) industry was not only related to import flooding. But also, the problems in the upstream and middle are considered to be less competitive.

 

The upstream textile industry produces polyester fiber and filament yarn. Meanwhile, the textile industry is producing fabric, yarn and printing. Then, the downstream industry makes garment products.

 

She said the textile industry was not optimal because the production machines were already old. "There is an old machining problem that they have not yet upgraded. So there are other problems that arise in the TPT industry," She said.

 

Because the condition of the machine is old, She continued, the operation of the industry is not optimal. The former managing director of the World Bank estimates that the middle industry is only able to utilize 40 to 50 percent of its operational capacity.

 

As a result of the inability of this middle industry, he said the upstream industry was forced to export its products for processing abroad. In this production chain, the inability of the middle industry also affects the downstream industry.

 

Normally, the production of upstream industries can be captured by the middle industry, then the middle industry can meet the needs of the downstream industry. "It means that the domestic production is not sufficient for the downstream industries," She added.

 

On the same occasion, Head of the Sub Directorate General (Kasubdit) of the Ministry of Finance's Customs Public Relations Deni Surjantoro added that besides the machine problem, the industry was also facing environmental issues from waste in the printing process.

 

Therefore, he considered necessary improvement measures in the middle industry. "The downstream industry wants to take goods while there is no production, because there is no production coming in, so it imports downstream," he said.

 

The lack of optimality in the middle industry is also suspected to be the cause of the entry of imported fabrics. Data from the Central Statistics Agency (BPS) mention that the volume of fabric imports increased during the 2016-2018 period. The average rising trend was recorded at 31.80 percent per year.

 

In 2016, cloth imports were recorded at 238,219 tons, then increased to 291,915 tons in 2017. Imports of cloth again grew to 413,813 tons in 2018.

 

The largest volume of Indonesian fabric imports comes from China with an import share of 67.86 percent in 2018. Besides China, Indonesia also imports fabrics from South Korea, Hong Kong, and Taiwan.

 

Quoting the official statement of the Ministry of Trade, the flood of imported fabrics threatens the performance of the domestic industry. The indicators include financial losses due to a decrease in production volume and domestic sales, an increase in the number of unsold goods, a decrease in productivity and used capacity, and a decrease in the number of workers.

 

 
		
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