Director for Textile and multivarious Industry

Presented By:
Director for Textile and multivarious Industry
Directorate General Of Manufacturing Based Industry



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Textile, Clothing and Footwear industry in Indonesia is a strategic
industry and has a promising market prospects, given the 3 major
roles:
1. To create Foreign Exchange,
2. To create Job opportunities, and
3. To Fulfill Domestic Needs.
Indonesia is known as a textiles and clothing producing country
with great international quality, and had been a supplier of footwear
that numbered three in the world. Footwear, textile industry and it’s
industry group generates huge foreign exchange and give surplus in
the balance of trade every year. Market orientation mostly for export
(70%) such as to US, UE and Japan.
Given the large role as a labor intensive industry, Textile, Clothing
and Footwear Industry is a priority sector undertaken by the
Directorate of Textile and Miscellaneous Industries Ministry of
Industry.
The industry has a deep structure from up stream to downstream
consist of 4 type of manufactures that are, maker of
fiber, yarn, fabrics and garment.
Industrial growth for the past five years in the average of
5%, export growth 8%/year for 1.8 % world market share but
domestic market utilization still below 60%
Unit
2007
2008
2009
2010
2011
2012 *)
Company
Unit
2,726
2,818
2,841
2,869
2,894
2,930
1.24
Investment
Rp (Billion)
137,906
142,068
146,170
149,889
158,247
164,809
4.15
Manpower
People
1,234,250 1,289,400 1,337,496 1,407,678 1,471,759 1,525,061
3.62
Export Volume
Ton
1,872,539 1,767,633 1,759,999 1,968,734 1,941,045 1,953,147
0.62
Import Volume
Ton
1,083,617 1,555,699 1,294,213 1,536,881 1,577,988 1,893,637
20.00
Export Value
US$ 000
9,809,038 10,144,002 9,261,903 11,222,793 13,358,515 12,459,967
-6.73
Import Value
US$ 000
1,998,138 5,102,644 4,171,162 6,186,386 8,430,428 8,143,552
-3.40
Surplus Value
US$ 000
7,810,900 5,041,358 5,090,741 5,036,407 4,928,086 4,316,415
-12.41
Source : Indonesia Investment Coordinating Board (BKPM), Statistic Indonesia Board (BPS),Ministry Of Industry (MOI),
Processed by Directorate Textile and Textile Product Industry
SHARE OF TEXTILE AND CLOTHING
EXPORT COMPARED WITH OIL AND
NON OIL EXPORT 2012
Textile
&Clothi
Oil
ng
19%
7%
Non-Oil
(exc
Textile
&Clothi
ng)
74%
Export
Δ 20112012 (%)
Value ( million USD)
Description
Import
13.36
11.22
10.14
9.26
8.43
8.14
6.19
5.10
2007
12.46
4.17
2008
2009
2010
2011
EXPORT COUNTRY DESTINATION FOR TEXTILE
AND CLOTHING INDUSTRY 2012 (US$ 12,46 SHARE OF TEXTILE AND CLOTHING MANPOWER 2012
MILYAR)
(112.8 Million People)
UNITED
STATES
32.90%
OTHERS
31.83%
Angkutan, Pe
rgudangan, d
an
Komunikasi
5%
BRAZIL
2.83%
UK
2.99%
UAE
3.29%
SOUTH
CHINA KOREA
3.60% 4.45%
Keuangan
2%
TURKEY
4.53%
JAPAN
GERMANY 8.58%
5.00%
Jasa
Kemasyaraka
tan
15%
Lainnya
1%
Pertanian
40%
Perdagangan
21%
Konstruksi
4%
Industri
12%
10,7% *)
TEXTILE & CLOTHING
• Textile sector is the largest contributor of foreign exchange classified in non-oil sector with an export surplus
more than U.S. $ 4 billion a year and affects 1.6% of GDP.
• Largest labor absorbing sectors namely Manufacturing Industry * 10.7%) of the total workforce Manufacturing
Industries (14.21 million) or 1.53 *) million people in 2012
• When the National Export decline in trade balance (- USD 1.62 billion), textile and clothing exports still have a
surplus of USD 4.31 million even greater surplus than Non-oil exports (USD 3.96 billion)
PERKEMBANGAN KINERJA INDUSTRI ANEKA TAHUN 2011
No.
1
2
3
4
5
Description
Investment (Rp
Million)
Number of
Manpower
Production
Capacity (Pair)
Export value
(USD 000)
Import value
(USD 000)
2007
2008
2009
3,099,509
4,191,063
4,297,017
5,752,435
9,843,615
71.12
414,930
443,587
446,287
501,410
601,427
19.95
1,132,729
1,178,579
1,182,259
1,266,299
1,428,238
1,637,955
1,885,473
1,734,984
2,500,873
3,301,942
32.03
81,909
162,141
131,621
244,196
356,793
46.11
Investment Growth Of Footwear
Industry (Rp Million)
2010
2011
2012 ~2011
12.79
Balance of Trade Footwear Industry (US$ 000)
3,301,942
9,843,615
2,500,873
5,752,435
1,637,955
4,191,0634,297,017
1,885,473
1,734,984
3,099,509
81,909
2007
2008
2009
2010
162,141
131,621
244,196
356,793
2011
2007
2008
2009
2010
2011
STATISTIC OF FOREIGN DIRECT INVESTMENT
TEXTILE, FOOTWEAR AND LEATHER PRODUCTS (US$
MILLION)
Industri Tekstil / Textile Industry
Ind. Barang Dari Kulit & Alas Kaki / Leather Goods & Footwear
Industry
255.0
130.4
154.8
497.3
473.1
69.4
161.9
25.4
234.3
2010
2011
2012
Q1 2012
Q1 2013
STATISTIC OF DOMESTIC DIRECT INVESTMENT
TEXTILE, FOOTWEAR AND LEATHER PRODUCTS
(Rp Billion)
Industri Tekstil
Ind. Barang Dari Kulit & Alas Kaki
76.7
4,450.9
12.5
431.7
2010
13.5
999.2
2011
2012
158.9
15.9
216.4
811.9
Q1 2012
Q1 2013
Based on data from the Indonesia
Investment Coordinating Board
(BKPM), after declining
investment in 2012, investment in
2013 for the textile
industry, Footwear and Leather
have goods experiencing trend
The Domestic Market Continues to Grow

Population and GDP per capita continues rising

Increased Purchasing Power Society

Per capita consumption Textiles Footwear and
Leather Goods of National continues to increase
Average annual population growth
1.5%
Average annual textiles per capita
5kg*

Indonesia: GDP per capita current


Indonesia: Population (million people)
(US$ & Million IDR)
ability of purchasing power parity rise .....
along with the increasing standard of living
worthy ......
Note: *base one fiber consumption **Projection
Source: BPS-Statistics Indonesia
• Human Development Index (HDI) is getting better, human resources (HR)
Indonesia is also getting better.
• The increasing standard of living associated with the ability to increase
purchasing power parity.
The Domestic Market Continues to Grow

Community Living Standards Marked increase with an increase in income
distribution for the middle-income group and the highest

Increased Consumption Society for Textile Products and Footwear became national
industry development opportunities
Income Distribution
Average Percentage Expenditure per Capita
Group Month Clothing, footwear and
headgear
GLOBAL MARKET

World population continues to grow followed by rising per capita consumption

The widespread use of applications in various textile and footwear products giving
National Industrial Strength (excluding apparel).

Market optimization ASEAN, China, Africa and Middle East

FTA negotiations with the U.S. and the EU27
SRENGTH OF INDONESIA’S TEXTILE, CLOTHING AND FOOTWEAR INDUSTRY

Indonesia’s Textile Industry structure integrated supporting industry growth and
diversification of products.

Machinery and equipment technology continues to increase (the success of the
restructuring program).

Manufacturers of polyester and rayon fiber as a national industrial base (forward
linkage).

Labor availability of supporting investment
STRUCTURE AND CHARACTERISTICS OF TEXTILE AND CLOTHING
INDUSTRY
Natural Fiber
Up-stream
Fiber Making
(Man-Made Fiber)
Spinning
Weaving
Mid-stream
•
•
•
•
•
•
•
•
•
Knitting
Dyeing/Printing/Finishi
ng
•
•
•
•
Down-stream
Garment & Other
Textiles Product
/Household)
•
•
Capital intensive
Full automatic technology
Large Scale
The number of workers is small, but
large output per worker.
Very large energy absorption.
Products: Natural Fibers, Synthetic
Fibers and Fiber Rayon
Semi-intensive capital
Modern high technology (growing
rapidly)
Labor is greater than the upstream
sector.
Large energy absorption
Products: Yarns, Fabrics Gazette
(Woven & Knitted),
Labor intensive (mostly women).
Technology has grown rapidly and
combined between the labor-intensive
and capital intensive.
High flexibility with end customers in
varied
Products: Garments, Carpets, Bed
linen, Curtain etc.
• MMF.
Polyester Staple Fiber
Polyester Filament Yarn
Nylon Filament Yarn
Viscose/Rayon Fiber
• Yarn: Cotton Yarn, Staple
Yarn Staple
• Woven Fabric
(Cotton Fabric, Filament
Fabric, Staple Fabric );
• Non-woven;
• Embroidery;
• Knitted Fabrics,
• Finished Fabrics
• Knit & Woven Garment.
• Wadding of textile
materials and articles,
• Thread Cord
• Other Made Up Textile
Articles
Source: API
 Great majority of spinning, weaving, dyeing / printing / finishing, apparel
(garment) and footwear industry have older machine and equipment that
lowers the productivity and competitiveness of the industry. An overview
of the number of machines that have an average age above 20 years are as
follows:
Sector
Spinning *
Weaving *
Knitting *
Finishing *
Garment *
Footwear**
Leather**
Unit
Spindle
Units
Units
Set
Units
Set
Set
Total Machine
7.803.241
248.957
41.312
349
290.838
3.000
1.000
Machine age > 20 years
quantity
5.025.287
204.393
34.743
325
226.854
1.500
600
%
64,4
82,1
84,1
93,2
78,0
50
60
 Textile, clothing and footwear sector increased quite good when viewed
from the side of exports, investment and the labor absorption.
However, the industry is still experiencing a very high dependence on
technology (Machine) that must be imported, besides of technology the
ability to design for textile and footwear are quite behind when compared
with some big countries such as France and Italy
COUNTRY OF ORIGIN OF TEXTILE MACHINERY
NO
1
2
3
4
5
6
7
8
9
10
COUNTRY
CHINA
GERMANY
JAPAN
INDIA
SWITZERLAND
TAIWAN
ITALY
SPAIN
INDONESIA
CZECH REPUBLIC
TOTAL
NUMBER OF
NUMBER OF
PERSENTAGE
PERSENTAGE
SELLING
UNIT
82
47
25
17
9
7
4
2
1
1
195
42,05%
24,10%
12,82%
8,72%
4,62%
3,59%
2,05%
1,03%
0,51%
0,51%
100,00%
1.235
145
219
192
27
12
19
6
44
8
1.907
64,76%
7,60%
11,48%
10,07%
1,42%
0,63%
1,00%
0,31%
2,31%
0,42%
100,00%
 Based on data obtained from the restructuring machine program almost all
production machinery used by the textile, apparel and footwear comes from imports
 Italy Brand that used in Indonesia mostly Picanol, Staubli, Marzoli, piloteli, etc
Source of machines : mostly imported
Type of Machines
Spinning
Weaving
Dyeing
Knitting
Others (boiler, air
compression, etc)
Total
Investment Value(Rp)
1,900,119,362,588.40
393,419,820,885.16
247,151,236,325.37
228,006,342,530.00
%
61.02%
12.63%
7.94%
7.32%
345,481,313,278.40
11.09%
3,114,178,075,607.30 100.00%
 Through a restructuring program since 2007 until 2012 the number of machines that
have been restructured are :
Sector
Unit
Spinning *
Spindle
Weaving *
Total
Machine
Machine age > 20
years
quantity
%
Restructure
d
Left Over
Quantity %
1,720,784 3,304,503
42.35
7,803,241
5,025,287
64.40
Units
248,957
204,393
82.10
6,529
197,864
79.48
Knitting *
Units
41,312
34,743
84.10
2,068
32,675
79.09
Finishing *
Set
349
325
93.20
373
-48
-13.75
Garment *
Units
290,838
226,854
78.00
64,112
162,742
55.96
Footwear**
Set
3,000
1,500
50.00
181
1,319
43.97
Leather**
Set
1,000
600
60.00
42
558
55.80
 Investment that needed for restructuring all of machinery that older than 10 years
old, as follow:
NO
SECTOR
MACHINE 11-19 MACHINE 20 YEARS INVESTMENT NEED TO
YEARS
AND OLDER
(Billion Rp)
1
FIBER
35 Line
6 Line
4,750
2
SPINNING
750.000 Spindle 2.2 Million Spindle
6,400
3
WEAVING
16.484 Unit
17.880 Unit
6,130
4
KNITTING
1.725 Unit
475 Unit
1,430
5
FINISHING
436 unit
245 Unit
2,000
6
GARMENT
10.197 Unit
8.470 Unit
107
7
FOOTWEAR
2.930 unit
2.747 Unit
89
8
LEATHER
127 unit
112 unit
140
TOTAL
21,046
In addition to efforts by improving the technology side, the Ministry of Industry also
make efforts to increase human resource capacity on Footwear and textile industry
through training, this was done in anticipation of the relocation of some industries are
getting fed along with wage increases in China's eastern coastal areas as well as to
anticipate the impact of the moratorium on sending workers to the Middle East.
Years
2011
Area
Type Of Training
West Java
Garment Training
990
Central Java
Garment Training
1.530
East Java
Footwear Training
480
JUMLAH
2012
3.000
West Java
Garment Training
1.400
Central Java
Garment Training
1.300
East Java
Footwear Training
5.100
JUMLAH
2013
Number of trained
(people)
7.800
West Java
Garment Training
2.700
Central Java
Garment Training
1.200
East Java
Garment Training
150
East Java
Footwear Training
1.050
JUMLAH
5.100
1. Investment guarantees and business continuity through Act No. 25 of 2007
on Investment.
2. Giving tax allowance through the revision of Regulation 52 of 2011 which
includes both industrial polyester staple fiber and filament, rayon fiber,
polyester chips and processing industry including natural fiber.
3. Provision of Facilities Exemption or Reduction Through the Corporate
Income Tax Regulation of the Minister of Finance No. 130/PMK.011/2011
including fiber for industry (Tax Holiday).
4. Provision of investment incentives through the Minister of Finance
Regulation 76/PMK.011/2012 Exemption of Import Duty on Import of
Goods and Material And Machines For Development Or Development in the
Framework of the Investment Industry.
1. Textile Research Center (BBT)
- Task and Function :
 To perform Research and Development
 To give technical service for textile and textile
product’s industry such as testing, training,
calibration, certification, R and D, consulting,
standardization and environmental
management
- In 2010 Center for Textile has establish a concept
of textile innovation center Product Development
and Design Center
- Location : Rd. Ahmad Yani No.390 Bandung, West
Java
2.
Textile Technology College (STTT)
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

STTT is the only tertiary education institution in textile science
and technology belong to government of the Republic of
Indonesia
Vision : to become the center of excellence in education,
research and community service in the field of textile
technology and garment which is competitive, ethnical and
human in the global era
Beside as education center, STTT offers a wide variety of
professional service in training,technical and consultancy
service for textile industry and textile community.
STTT has training partnership, example Indonesian-German
Institute (IGI) has provided CAD/CAM for textile printing design,
Schlafhorst has provided open end spinning and winding
machine, Savio has provided winding machine,Rieter has
provided drawing machine and compact spinning. All the
machines purpose for hand on training and research.
Location : Rd. Jakarta No. 31 Bandung, West Java
3.
4.
5.
6.
7.
Support from Balai Besar Kulit Karet dan Plastik ( Center for
Leather, Rubber and Plastics)
Support from Akademi Teknologi Kulit ( Academy of Leather
Technology )
Footwear Industries especially in the field of design highly
desirable especially design experties from abroad country like
Italy
Many designers are still oriented and relied to the famous
design from other countries
Many Indonesian designers are still remains as seamstress
1. Indonesia is very open to foreign & domestic
investment with easy both fiscal and non fiscal incentives
2. Most of the machinery and equipment for the both of textile
and footwear industry is imported, so we hope that
manufacturers
of textile machinery and equipment can invest in Indonesia
to fill the huge market in Indonesia
3. Italy has big opportunity to invest in the field of textile and
footwear machinery in Indonesia
4. Italy with Government of Indonesia can establish Textile
Service Center In Order to provide skilled operator by
integrating center for textile research and textile technology
college