The industry plays an important part of Indonesia’s economy as a large source of jobs and export earnings. Bank of Indonesia reduced its policy rate by 25 basis points to 5.75% in February 2012 to boost economic growth. Indonesian textile and garment industry is integrated in almost every phase of production. The country happens to be one of the largest textiles and apparel producer in the region, although now it is not as competitive as it used to be with its rival in Asia-Pacific due to the conditions of factory machinery, high electricity prices, ASEAN free-trade agreement with China, global economic slowdown, and the crisis in Europe. As new export data across Asia shows some softening in demand for Asian products. Moreover, financial markets remain nervous.
All said and done, even as businesses enjoy strong domestic growth and Asia, they must be prepared for a volatile and difficulty year ahead.
Salient Points
- Indonesia’s textile growth propelled by domestic demand as global textile and garment market remain subdued next year.
- More Chinese firms invest in Indonesian textile industry in particular West Java. China has committed 234 textile projects worth USD 473mn according to The Ministry of Trade and Industry.
- Budget allocation for textile machine upgradation slash by 4.6 percent from IDR 152.5billion in 2011 to IDR 145.5 in current year.
- China dominates Indonesia textile imports accounting for 60 percent of total imports according to Indonesian Textile Businesses (API)
This is only a small portion of the insight provided in the Indonesia Textile and Garment Industry report . Read more and purchase>>
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