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Corona Virus Makes Garment Industry Raw Material Crisis PDF Print E-mail
Written by Maizer   
Wednesday, 05 February 2020

The spread of the corona virus is considered to have an impact on the textile industry and textile products (TPT) today. Because the supply of raw materials and machine parts for the garment industry from China has now stopped.

 

The Indonesian Textile Association (API) states that the supply of raw materials and engine parts from China will enter the fastest in the fourth week of February. Meanwhile, the association counts raw materials and spare parts from other countries far more expensive than the products from the Bamboo Curtain country.

 

"This shows how much our dependence is on China. The wisdom can make us realize that this dependency must shift and become an opportunity to be filled by domestic [raw materials]," said Secretary of the West Java API Rizal Rakhman.

 

Rizal added that he had found a source of raw materials and spare parts from other countries such as South Korea and India. However, he continued, the prices of the two countries are 30-40 percent higher than China.

 

Even though local manufacturers can fill all requests, he said, the price of local raw materials is still around 30 percent higher than Chinese raw materials. Therefore, Rizal assessed that the reduction in gas tariffs at the beginning of the second quarter / 2020 could significantly reduce the price of local raw materials.

 

Meanwhile, the Association of Filament and Filament Yarn Producers (APSyFI) assessed the outbreak of the corona virus outbreak in the Wuhan district of China could be an opportunity for a national TPT manufacturer. The reason is, Wuhan is one of China's manufacturing districts. In other words, the supply of textile products from China will slow down.

 

"In the last 30 years, this is the first time Toyota has shut down production there. Because their supply of TPT has stopped, it is likely that there will be opportunities for non-China countries to grab their markets again," said APSyFI Executive Member Prama Yudha Amdan.

 

In addition, he continued, the outbreak of the corona virus coincided with the month of Chinese New Year celebrations. As is known, China reduced its production capacity for one month during Chinese New Year.

 

Therefore, Prama predicts that the national TPT industry will get the blessing of Ramadan, considering the supply of raw materials on the market will be replaced with local raw materials at the beginning of the second quarter / 2020.

 

On the other hand, Prama assessed that the focus of current government regulations has been designed to support industrialization. According to him, the condition of the national textile industry will improve as long as the government is consistent in implementing the regulation.

 

"When playing excise or playing importers, that's a different story. However, if we see it has improved," he said.

 

Separately, Secretary General of the Association of Fiber and Filament Yarn Producers (APSyFI) Redma Wirawasta said that the inclusion of PLN in the regulation on the reduction of gas tariffs would have a significant impact on the entire textile and textile product (TPT) industry. Meanwhile, Redma said, giving discounts would have a significant impact on upstream manufacturers and between TPT.

 

"The energy is 23--24 percent [of the total production cost]. Of the 23 percent, gas is around 75 percent, the rest is electricity," he said.

 

Redma said that TPT upstream manufacturers need gas in the polymerization process. Therefore, Redma stressed that the gas tariff for the industry must be realized immediately. "This [gas tariff] must go down, not to not go down," he said.

 

 
		
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