Safeguard Textile Imports Applicable, Fabric Industry Adds Investment
Written by Maizer   
Wednesday, 22 July 2020

The Ministry of Industry (Kemenperin) to record the utility of the textile industry and textile products has improved in July 2020. Director of the Textile, Leather and Footwear Industry of the Ministry of Industry Elis Masitoh said that the fabric industry's utility is currently in the range of 60 percent. As is known, the pandemic corona virus or Covid-19 has hit the fabric industry's utility below the 20 percent level in April-June 2020.


"I see now in the market there is a shortage of goods for certain products that are affected by safeguards. Now, the market is looking for [fabric production] in the country," he said.


The Central Statistics Agency (BPS) recorded that in January-May 2020 almost all import volumes of textile products fell by an average of 17.47 percent on an annual basis. Meanwhile, in that period only yarn products recorded a growth in import volume of 1.02 percent to 52,504 tons.


Meanwhile, the volume of imported fabrics was corrected 31.66 percent annually to 124,204 tons. Meanwhile, the value of fabric imports dropped 22.81 percent to US $ 124.6 million.


Based on data from the Ministry of Industry, fabric products have the deepest trade balance deficits in the textile and textile products (TPT) group. As of 2019, the fabric industry deficit is valued at US $ 3.63 billion with import values ​​reaching US $ 4.72 billion.


Previously, the Ministry of Finance had added import duties to 121 eight-digit tariff posts for textile products. The addition of import duties is contained in two Regulation of the Minister of Finance.


First, the implementation of PMK No. 114 / PMK.010 / 2019 dated August 5, 2019 namely BMAD for imports of Polyester Staple Fiber (PSF) synthetic staple fiber products from India, China and Taiwan with a tariff rate of 5.8 percent - 28.5 percent which is valid for 3 (three) ) year. The imposition of BMAD has been in force since 2010.


Second, PMK No. 115 / PMK.010 / 2019 dated August 6, 2019 related to BMAD for the import of Spin Drawn Yarn (SDY) synthetic filament yarn products from China with a tariff rate of 5.4 percent - 15 percent which is valid for 3 (three) years.


Meanwhile, to date there have been around 1,540 medium and large scale fabric industries, while the small and micro scale fabric industries have reached 131,000. Until the end of 2019, the installed capacity of the national fabric industry is 3.13 million tons per year with a workforce of 678,360 people.


Elis conveyed that the reduction in domestic fabric imports made the national fabric parishes decide to make additional investments. This is because the fabric industry's production capability is currently only able to meet one-eighth of the national demand.


"Now, the demand for cloth is 8 million meters per month. So, several industries have started investing in [weaving] products. [There is] one manufacturer [planning] to bring in 400 weaving machines," he said.


As is known, there are two processes of processing yarn into fabric, namely knitting and weaving. Meanwhile, the two fabric products are grouped into raw or gray cloth.


The next process in the fabric industry is processing gray cloth into finished cloth through the finishing process. Elis said that the demand for fabric now is also high because demand for the garment industry is starting to move.



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