Domestic textile products have been losing their foothold in Indonesian market over the past five years with imported products making a dominated presence controlling 70 per cent of the domestic textile
. In addition, clothing no longer appears a priority requirement for the people with motorcycles figuring higher in their priority.
"Over the past five years, the domestic textile products have continued to lose their foothold in competition on the domestic market. Imported products have held control of 70 percent of the $10 billion market a year leaving only 30 per cent of the market for domestic products," Indonesian Textile Association (API) chairman Ade Sudrajat said, according to an Indonesian news agency.
Ade said trade in textile products such as finished wear was relatively quiet in areas like Tanah Abang market in Jakarta, Turi market in Surabaya and Klewer market in Solo. He also expressed concerns over the declining purchasing power of consumers with clothing no longer appearing a priority requirement, the report said.
The government needs to address the problem. Earlier, there was government help in form of direct aid (BLT) that could increase peoples' buying power.
"Clothing is no longer a priority requirement for the people. Motorcycles have become higher in their priority," he said in the report.
API also noted that 90 per cent of the basic material for readymade wear is imported like cloth from South Korea, China and Japan. However, API is optimistic that the country's textile industry would continue to grow as indicated by data from the Central Bureau of Statistics (BPS) which showed that the country's exports of textiles rose 3.8 per cent year-on-year in the first quarter of 2017.
"I am confident in the next quarter the country's exports of finished products would increase again," he said.
Earlier, the industry ministry said it would coordinate with the trade ministry to curb imports of textiles and textile products (TPT) to protect the domestic industry. Director general of chemicals, textiles and multifarious industries Achmad Sigit Dwiwahjono said the government encourages development of upstream textile industry.
"The people are called on to use local products as their contribution to boosting the domestic industry," Dwiwahjono was quoted as saying.
Another challenge faced by the industry is that most of the country's textile factories especially in weaving and knitting sector still use old machines, which are no longer competitive in efficiency, the report said. Exports of TPT grew only 2 per cent year-on-year to $2 billion in the first two months of 2017, Achmad said.
He said the textile market is predicted to continue to increase domestically and globally with the growing population and increase in demand from non wear segments such as for furniture.
Industry minister Airlangga Hartarto said the country's TPT industry had suffered a contraction in growth. In 2016, investment in the TPT industry was valued at Rp7.54 trillion with export earnings at $11.87 billion. The industry provided jobs for 17.03 per cent of working people in the manufacturing industry.
Textile industrialists should not delay investing, otherwise in the next five years it would be difficult for Indonesia to compete in international market with other Asian major textile makers such as India, China, Vietnam and Bangladesh, Hartarto added. (SV)