Textile Industry Faces Market Downturn
Written by Maizer   
Friday, 09 October 2020

The manufacturing index in September 2020 declined again. In the textile industry sector, the decline in raw material purchases by export-oriented manufacturers is thought to be the trigger.


The Indonesian Textile Association (API) stated that several export-oriented manufacturers decreased their purchases of raw materials due to lower purchases on the global market. This caused the utilization of several manufacturers to contract slightly.


"[Utilization in] September-October can still be said to be flat. The average position is 50%, but some factories have decreased utilization, "said Secretary General of API Rizal Rakhman.


Rizal stated that the main challenge faced by textile manufacturers in September 2020 was not the return to full-scale social restrictions (PSBB). Several centers of raw material for the garment industry, such as Tanah Abang and Mangga Dua, are still open.


According to him, the main challenge faced by manufacturers at the end of the third quarter of 2020 is that consumer purchasing power has not yet improved. In addition, economic growth in the third quarter of 2020 which remains negative has made the national economy fall into a recession.


"So, people who want to invest are somewhat doubtful. Then, middle-low consumers still don't want to buy textiles, while upper-middle consumers still don't spend on durable goods, "he said.


Rizal said that his party had taken several steps so that demand in the global market was at least maintained until the end of the year.


Meanwhile, the core of this cooperation is to make Indonesia the main supplier country for textile products that international buyers want. Rizal said the cooperation was a continuation of the memorandum of understanding between the textile industry players and the textile industry workers union.


"[Cooperation] is important to build positive market sentiment. [The cooperation shows] that Indonesia is the right country for them to place orders because of the conditions between the textile industry [actors] and the [harmonious] trade union. Buyers are sensitive to labor issues, ”he said.


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