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Trade Ministry Targets Textile and Clothing Export to reach US$15 billion this year

Jakarta February 2019

Menteri PerindustrianAirlangga Hartarto's visit, Minister of Industry

Industry Ministry has set a target of US$15 billion for textile and clothing export this year. In previous years the Ministry set target for textile and clothing export where in 2017 to reach US$12 billion. As a matter of fact, export in 2017 amounted to US$12.57 or exceeded the target set. Furthermore, in 2018 the Ministry also set target of US$13.5 billion and it is more likely the export target can be achieved. Several big export-oriented companies showed much better performance throughout 2018 where companies were able to increase exports as well as profit margin.

Industry Minister Airlangga Hartarto recently told the media that by January to October 2018 total textile export of textile and clothing recorded US$11.12 billion, representing 7.12% increase compared to the same period in 2017. Airlangga firmly believes that textile and clothing industry in Indonesia is still one of the leading exports and employ large number of workers . For this reason the industry taken to be one of the pilot project for implementing industry 4.0 in Indonesia. National textile industry needs to immediately utilize digital technologies such as 3D printing, automation, and the internet of things to make the industry ready for Industry 4.0 era to increase efficiency and productivity. Government has been working on a number of policies to support business in terms of investment, customs, simplifying bureaucracy etc.

Relocation of textile and clothing factories to Central Java in the past few years has contributed to the increase of national textile export value. The level of wage rise, especially in Greater Jakarta and its surrounding areas for labour-intesinve industry such as clothing is considered too high. Some business people revealed that they had to relocate to Central Java because the annual of wage rise force the labor-intensive industry to relocate or shut down business. Companies have to relocate to areas where wages are still possible to operate as the annual increase in wages not go hand in hand with productivity. "In the end productivity reaches its peak and it is impossible to increase more while wages continue to rise every year," said one garment company HRD at Cakung Bonded Zone (KBN) Jakarta.

Referring to the performance of several big textile companies throughout 2018, most of which are located in Bandung and Central Java, this can be the right signals that export target can be achieved this year. Among the companies that experience good business throughout 2018 are PT. Sriteks, PT. Pan Brother, and PT Sunson Texstile Manufacture Tbk, PT Trisula International Tbk. (TRIS), and PT Nusantara Inti Corpora Tbk. Business people in this sector believe that the Indonesian textile industry will continue to grow in the future if a number of contra-productive policies removed, and make free trade agreement especially to the main export destination countries such as America and the European Union.