The textile and textile products (TPT) industry is one of the leading sectors making a significant contribution to economic growth. With high added value, Indonesia's modern textile industry reached 100 years in 2022. This celebration is a moment to focus on improving competitiveness and productivity and on addressing the challenges the TPT industry has faced.
In Q1 2022, the TPT industry contributed 6.33% of total non-oil and gas manufacturing GDP. Its share of total national exports was 5.67% in 2021 and 5.33% in January–May 2022. Investment in the sector reached IDR 6.5 trillion in 2021 and IDR 2.4 trillion in Q1-2022.
“The TPT industry is a labor-intensive, export-oriented sector that has also withstood disruption from the Covid-19 pandemic. We believe increased TPT investment can accelerate this subsector's growth harmoniously, from upstream to downstream,” Minister of Industry Agus Gumiwang Kartasasmita said in Jakarta on Thursday (21/7).
In December 2021, the Minister inaugurated the expansion of nine TPT industries in Bandung Regency, West Java. The investments cover fiber, yarn and fabric making through to apparel, in line with Kemenperin's import substitution target.
The TPT subsector is a source of state revenue contributing to national productivity and employment. Coinciding with 100 years of the TPT industry, Kemenperin is working to overcome the various obstacles it faces.
Kemenperin has identified that the TPT industry currently faces problems connecting upstream and downstream supply chains. The subsector has a complete upstream-to-downstream structure, but it is not yet interconnected, causing productivity imbalances.
In addition, challenges for the TPT industry will grow with the Regional Comprehensive Economic Partnership (RCEP) agreement and the Belt and Road Initiative (BRI), so the industry needs to prepare to improve competitiveness and efficiency. It also needs to prepare for a carbon tax, which is still under technical discussion.
Acting Director General of Chemical, Pharmaceutical and Textile Industries (IKFT) at Kemenperin Ignatius Warsito added that the TPT industry, especially fiber and fabric finishing industries that produce persistent organic pollutants, must also improve compliance in chemical use and waste management as regulated by the Stockholm Convention. The TPT industry has previously helped make the Citarum Harum program a success. “Another challenge is labor policy, including annual wage increases,” Warsito explained.
To overcome these challenges, Kemenperin is improving competitiveness through promoting and facilitating Industry 4.0 technology to raise productivity, assisting and advocating for industries injured by FTA implementation, dumping and other factors, and protecting the domestic market by increasing the Domestic Component Level (TKDN), creating e-catalogs, and promoting clothing at home and abroad.
Kemenperin has also initiated a Clothing Resilience Bill and is drafting SNI and mandatory SNI for clothing products to increase import substitution of TPT products. “This is the government's step to restore the glory of the national textile and textile products industry,” Warsito stressed.
To mark 100 years of the national TPT industry, one agenda held by Kemenperin is the Indonesia Textile Summit 2022, themed “A Century of Indonesian Textile Glory”. The meeting, to be held in Bandung on 30 July 2022, aims to provide expert insight on the condition of the national TPT industry and steps for the industry to win markets from a macroeconomic and public policy perspective. It will also enable TPT industry players and stakeholders to convey problems and policy proposals to the government.
“Through the Indonesia Textile Summit 2022, Kemenperin seeks input to formulate policies and guidance programs for the TPT industry, in order to restore the glory of the national TPT industry,” he concluded.
Source: Press Release of the Ministry of Industry of the Republic of Indonesia