OVERVIEW THE INDONESIA TEXTILE INDUSTRY
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1 OVERVIEW THE INDONESIA TEXTILE INDUSTRY RAMON BANGUN Director of Textile and Multifarious Industry Directorate General for Manufacturing Industry Base Ministry of Industry October,
2 Non Oil Industries growth in the second quarter was 6.58% higher than the national economic growth of 5,95% and the performance of the textile industry at 5.93%. The average of industrial growth for the past five years is 5%, while that of export growth 8%/year. Indonesia has only 1.8 % of world market share and domestic market share is still below 60% Textile industry are the strategic industry to be developed because it has a significant role in contributing foreign exchange, provides lot of work opportunities and also supplies the basic needs of people. The industry has 10.6% share of total manufacturing industry work force. Export surplus more than U.S. $ 5 billion per year. The industry has a deep structure from up stream to downstream consist of 4 type of manufactures that are, man made fiber, yarn, fabrics and garment. 2
3 3
4 TEXTILE INDUSTRY RESTRUCTURING PROGRAM BACKGROUND 1. Number of Machine in Textile Industry Type of Industry unit quantity Machine age > 20 years quantity % Spinning * Spindle ,4 Weaving * Unit ,1 Knitting * Unit ,1 Finishing * Unit ,2 Garment * Unit ,0 Source: * The Industrial Strategy Proposal, Jetro Jakarta
5 TEXTILE INDUSTRY RESTRUCTURING PROGRAM One of the major problems of the textile industry is the life of the engine that are outdated (over 20 years) this leads to high energy consumption, engine speed and low product quality and also another issue that must be faced by the industry is the emergence of newly industrialized countries that already adopting new technologies 2. Objectives Ministry of Industry on 2007th launched Textile Industry Restructuring Programme. To support textile industry for old machinery replacement to enhance competitiveness with government incentive. 5
6 COUNTRY OF ORIGIN OF TEXTILE MACHINERY based on restructuring programme No. Country % No. Country % No. Country % No Country % No. Country % No. Country % 1 Japan Jepang China CHINA 25,7 1 SOUTH KOREA 87,46 1 SOUTH KOREA 81,82 2 China Germany Japan SOUTH KOREA 17,8 2 CHINA 8,10 2 INDIA 7,82 3 Germany Singapura South Korea JAPAN 16,4 3 INDIA 3,34 3 CHINA 6,85 4 Taiwan Taiwan Taiwan TAIWAN 9,1 4 SWITZERLAND 0,51 4 TAIWAN 2,29 5 Hongkong Italy Indonesia INDONESIA 8,22 5 INDONESIA 0,47 5 SWITZERLAND 0,66 6 Switzerland China Germany GERMANY 5,78 6 FRANCE 0,05 6 USA 0,25 7 India South Korea Hongkong INDIA 4,7 7 JAPAN 0,04 7 JAPAN 0,13 8 South Korea Amerika India SWITZERLAND 3,22 8 TAIWAN 0,01 8 INDONESIA 0,08 9 Italy Switzerland ITALY 2 9 HONGKONG 0,01 9 ITALY 0,05 10 USA USA HONGKONG 1,65 10 GERMANY 0,01 10 GERMANY 0,02 11 France Italy USA 1, SINGAPORE 0,01 12 Belgium Denmark FRANCE 0, Indonesia France BELGIUM 0,61 14 Singapore Singapore SINGAPORE 0,57 15 England England VIETNAM 0,57 16 Austria Spain ENGLAND 0,35 17 Czech Austria MALAYSIA 0,3 18 Spain Turkey AUSTRIA 0,26 19 Sweden Vietnam SPANYOL 0,22 20 Greece Malaysia FINLAND 0,13 21 Malaysia Thailand SOUTH AFRICA 0, Belgium CZECH REPUBLIC 0,09 23 Sweden NETHERLANDS 0,09 24 Australia TURKEY 0,09 25 Canada DENMARK 0,04 26 Czech SWEDEN 0,04 27 South Africa THAILAND 0,
7 EVALUATION OF TEXTILE INDUSTRY RESTRUCTURING PROGRAM Number Analysis Textile Industry Labor Increase Production Capacity Growth (%) Productivity Growth (%) Efficiency In Energy (%)
8 Machinery Status Before and After Restructuring Program NUMBER OF MACHINES IN TEXTILE AND TEXTILE PRODUCTS INDUSTRY Type of Industry Unit Machines Age 20 yrs * New Machinery by Restructuring Program in Spinning MP 5,025,287 1,848,212 Weaving ATM 204,393 7,249 Knitting MR 34,743 2,441 Finishing Unit Garment MSJ 226,854 67,386 Source : Restructuring Program Ministy of Industry 8
9 9
10 INVESTMENT PROGRESS Source of machines : mostly imported Type of Machines Investment Value (USD) % Spinning 190,000, % Weaving 39,340, % Dyeing 24,715, % Knitting 22,800, % Others (boiler, air compression, etc) 34,548, % Total 321,403, % 10
11 ESTIMATED OF THE INVESTMENT NEEDS FOR REPLACING THE OLD MACHINE INDUSTRY INVESTMENT NEEDS FOR REPLACING THE OLD MACHINE, BASED ON MACHINE AGE CATEGORIES (in Million USD) TOTAL Years >20 Years FIBER/FILAMENT 393,26 11,24 404,50 SPINNING 131,97 412,80 544,77 WEAVING 303,92 218,25 522,18 KNITTING 89,14 32,69 121,83 FINISHING 111,19 60,50 171,70 GARMENT 5,02 4,17 9,18 TOTAL 1.034,51 739, ,16 11
12 Providing skilled workforce through training program. Since 2011 the Ministry of Industry has facilitated training for more than 16,500 people to provide skilled workforce for garments and footwear industry. The Ministry of Industry will continue to increase the competence and upgrading human resources for textile, garments and footwear industry; Developing standards of textile products (SNI) for the purpose good quality, security and safety of Textile and Textile Product and the developing of workforce competency standard textile industry (SKKNI) Facilitation program exhibition in domestic and foreign for market access, promotion national textile products; 12
13 Prospect of Indonesia Textile Industry Competitiveness of Indonesian textile industry will continue to improve with increasing energy efficiency and increased productivity Indonesian textile industry have market opportunities in local market (with 220 million people) and exports that have been targeted to reach US$13.3 billion in Clothes for Moslems, High fashion ladies garments and those with ethnic designs could help boost the country's textile industry Technical Textile and Non Woven are another sector textile will be priority developed in the future 13
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