Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
Indonesian Textile Industry and Machinery Market
Report and Statistics 2012 and 2013
Country
Reference period
: Indonesia
: January 2012 – December 2013
1. The General Economic Situation in the Country for 2012 and 2013
In 2012, despite the global economic downturn suppressing the trade lines, by public
domestic consumption and high investment, Indonesia’s economy in 2012 maintained its
growth momentum amid a slowdown and uncertainty in the global economy. Indonesia’s
GDP reached Rp 8,241.86 trillion or US$ 862.5 billion, registering a growth rate of 6.2%,
down from 6.5% in 2011, with inflation remaining relatively low at 4.3%. The biggest
contributor to Indonesia’s overall GDP is the manufacturing sector, accounting for 23.94% in
2012. Amid weaker exports performance, the national economic expansion was driven
mainly by strong domestic demand, buttressed by favorable macroeconomic and financial
conditions.
Total exports in 2012 reached US$ 190.04 billion, representing a decrease of 6.61% over
2011 which reached US$ 203.50 billion. Non-oil and gas exports dropped from US$ 162.02
billion to US$ 153.05 billion, registering a growth rate of - 5.54%. Total imports rose by
8.04% to US$ 191.67 billion from US$ 177.43 billion, with non-oil and gas imports increasing
by 9.06% from US$ 136.73 billion to US$ 149.13 billion, resulting in a trade deficit of US$
1,659.2 billion.
Indonesia’s economic growth in 2013 was lower than in 2012, down to 5.8% from 6.2% in
the previous year, reaching Rp 9,083.97 trillion or US$ 912.5 billion. The global economy,
especially in developed countries, was slowing, followed by corrections to economic growth
in emerging markets, including Indonesia. In terms of domestic demand, investment growth,
particularly non-construction investments, was also slowing. The uncertainty of the global
financial situation has increased sharply in line with negative sentiment to the reduction of
the monetary stimulus in the US. The average exchange rate in 2013 weakened to Rp
10,562.7 per US Dollar.
Total exports in 2013 dropped further to US$ 182.55 billion, representing a decrease of
3.94% year-on-year over 2012. Total imports decreased by 2.63% to US$ 186.63 billion from
US$ 191.67 billion, resulting in a trade deficit of - US$ 4.08 billion.
Entering the year 2014, there are still many challenges to be faced by the country.
Indonesia’s economic growth is still going to be affected by the global economic outlook.
Volatility in global commodity prices and demands is expected to continue to affect
Indonesia’s trade balance. In the context of regional economic outlook, uncertainty of the
global economic recovery will also affect exports and imports and investments in regions.
Indonesia’s economy is expected to grow moderately in 2014 due to the impact of the
economic tightening policy. The moderation in domestic demand is expected to continue,
while export performance will improve with the continuing global economic recovery to drive
improvements in Indonesia’s economic structure, with economic growth in 2014 expected to
reach 5.6%. Inflation will likely normalize to 5.5% in 2014 after fuel price hike in 2013. In the
medium term, inflation is expected to converge to its regional average of 3.5-4.0%.
2
Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
2. Summary of the Economic Trend in the Textile Sector for 2012 and 2013
According to data from the Ministry of Trade, exports of textile and textile articles (including
garments) rose from US$ 12.46 billion in 2012 to US$ 13.30 billion in 2013, representing an
increase of 6.74%. Textiles and apparel account for 8.69 % of total non-oil exports from
Indonesia. Out of the total textile and textile articles exports, garments made up for a share
of approximately 60.0%. Imports rose by 5.66% from US$ 5.3 billion to US$ 5.6 billion,
resulting in a surplus of US$ 7.7 billion. As a result in the influx of garment imports, the
domestic sales of textile and textile products dropped from US 7.6 billion in 2012 to US$ 6.8
billion, registering a negative growth of 10.52%.
According to the Indonesian Textile Association (API), backed by good demand from
countries like the US and Japan, Indonesia’s textile exports are expected to reach $14.4
billion in 2014 and the country’s textile sector is expected to attract investments of about
US$ 165 million.
3. Imports of Textile Machines, 2012 as against 2013 (in 1000 of US$)
Machines
Jan-Dec 2012
Jan-Dec 2013
Spinning
79,136.49
86,448.38
Weaving
119,948.71
107,675.10
Knitting
17,719.30
14,149.37
64,856.49
35,353.25
Finishing & Others
Accessories
29,491.16
48,935.39
311,152.15
292,561.50
Total
Source: Central Statistics Agency, processed
Growth (%)
9.24
(10.23)
(20.15)
(45.49)
65.93
(5.97)
4. Origin of Imported Machines, January-December 2012 (in 1000 of US$)
Country
Spinning
Weaving
Knitting
Finishing &
Others
2,671.60
5,630.23
4,772.74
36,581.94
5,443.08
1,964.84
5,465.64
210.93
64.14
32.60
2,018.74
64,856.49
Accessories
Japan
17,791.45
26,888.19
920.36
1,758.05
China
12,497.84
48,469.71
1,362.75
6,669.25
Taiwan
3,022.15
10,408.09
2,952.91
2,278.62
Germany
15,722.96
8,520.94 10,522.39
8,642.03
Korea
3,259.27
2,065.03
751.08
574.74
United States
161.22
141.33
102.23
43.93
Italy
2,516.93
4,938.88
99.54
311.44
United Kingdom
313.28
313.47
22.33
110.06
Switzerland
7,108.84
382.82
164.79
1,569.34
India
10,063.04
1,294.28
264.02
790.15
Others
6,679.53
16,526.00
556.91
6,743.55
TOTAL
79,136.49 119,948.71 17,719.30
29,491.16
Source: Central Statistics Agency, processed
Origin of Imported Machines, January - June 2013 (in 1000 of US$)
Total
50,029.64
74,629.78
23,434.50
79,990.26
12,093.20
2,413.55
13,332.44
970.07
9,289.93
12,444.08
32,524.72
311,152.14
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Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
Country
Spinning
Weaving
Knitting
Japan
15,076.73
36,817.24
1,214.90
China
21,405.99
28,719.21
1,083.30
Taiwan
2,016.34
7,563.49
367.76
Germany
15,383.20
6,489.08
4,233.51
Korea
3,176.17
894.50
813.92
United States
414.17
209.69
36.02
Italy
2,442.48
2,192.61
248.53
United Kingdom
459.44
2.99
73.30
Switzerland
7,041.91
2,266.16
278.98
India
11,572.38
2,387.47
1,304.64
Others
7,459.58
20,132.69
4,494.51
TOTAL
86,448.38 107,675.10
14,149.37
Source: Central Statistics Agency, processed
Finishing &
Others
7,761.68
7,068.34
4,848.34
3,594.42
3,376.59
1,814.34
1,231.38
810.96
699.31
56.51
4,091.40
35,353.25
Accessories
3,568.47
16,435.89
3,354.33
4,074.91
780.00
44.67
10,075.85
22.28
2,487.40
1,939.43
6,152.17
48,935.39
Total
64,439.02
74,712.71
18,150.25
33,775.13
9,041.18
2,518.88
16,190.84
1,368.97
12,773.76
17,260.42
42,330.35
292,561.49
5. Positive Quality Image of Italian Textile Machinery Production and Trade
Italian textile machinery has a high-quality image in Indonesia and is recognized for their
technological innovation, creativity, sophistication, flexibility, durability and reliability, and is
acknowledged to be among the best in the market.
6. Shortcomings of Italian Textile Machinery Production and Trade
Interviews with numerous end-users of Italian textile machinery indicated that the main
weakness does not lie in the machines themselves but rather in the weak distribution
network and lack of promotion on the part of the local agents and distributors. One of the
most important key criteria is the credit/ payment terms. In general, Japanese textile
machinery suppliers are known to offer the best payment terms, better than European
competitors. Chinese equipment on the other hand offer machines at the lowest prices and
are known to have improved their quality and technology.
7. Investments in the Textile Industry Planned for the Near Future (5 years) ok
Year
Foreign Investment (PMA)
Domestic Investment (PMDN)
Number & Total Value
Number & Total Value
2009
66 investments (US$ 251.4 million)
23 investments (Rp 2,645.7 billion)
2010
8 investments (US$ 154.8 million)
8 investments (Rp 431.7 billion)
2011
166 investments (US$ 497.3 million) 51 investments (Rp 999.2 billion)
2012
149 investments (US$ 473.1 million) 22 investments (Rp 4,450.9 billion)
2013
241 investments (US$ 759.7 million) 88 investments (Rp 1,686.3 billion)
Source: Investment Coordinating Board, processed
Note: The above data is based on investment approvals by the Investment Coordinating
Board (BKPM) and hence does not necessarily represent the actual investments to take
place in the forthcoming five years.
4
Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
8. Production of Various Textile Products: January - December 2010
(code PRODCOM)
Description
Code
Volume (in kg)
Value (in US$)
Man-made fibres yarn
(17.10.51 to 17.10.55)
22,520,841,201
4,668,140,512
Man-made fibres fabrics
(17.20.31 to 17.20.33)
1,818,005,297
3,007,378,979
Cotton yarns
(17.10.43)
4,677,626,949
700,601,844
Cotton fabrics
(17.20.20)
286,848,296
742,575,786
Wool yarns
(17.10.42)
1,080,000
4,877,790
Wool fabrics
(17.20.10.22)
29,317,480
2,318,685
Silk yarns
(17.10.41)
115,321
8,235,048
Silk fabrics
(17.20.10.10)
126,559,511
Knitwear
(17.72)
10,471,816
(77,910,309 m)
164,706,509 pcs
Socks and Stockings
(17.71)
46,906,534 pcs
98,989,389
478,150,669
Source: Central Statistics Agency, Large and Medium Industrial Production Statistics,
processed. Year 2010 constitutes the latest production data available.
9. Exports of Various Textile Products: January - December 2012
(code NACE/CLIO)
Description
Man-made fibres yarn
HS – Code
Volume (in Kg)
Value (in US$)
312,385,971
888,088,117
150,493,857
959,852,730
Cotton yarns
(54.01 to 54.06 55.09 to 55.11)
(54.07 to 54.08 55.12 to 55.16)
(52.04 to 52.07)
116,688,393
380,501,353
Cotton fabrics
(52.08 to 52.12)
33,464,712
210,548,986
Wool yarns
(51.07 to 51.10)
-
-
Wool fabrics
10,388
150,742
Silk yarns
(51.11 - 51.12 51.13)
(50.04 to 50.06)
965
1,790
Silk fabrics
(50.07)
-
-
Kneatwear
(61.09 to 61.10)
97,640,102
1,388,829,574
Socks and stockings
(61.15)
9,585,480
114,254,775
Man-made fibres fabrics
Source: Central Statistics Agency, processed
Exports of Various Textile Products: January – December 2013
(code NACE/CLIO)
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Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
Description
Man-made fibres yarn
HS – Code
Volume (in Kg)
Value (in US$)
355,176,939
952,054,531
146,021,282
863,853,853
Cotton yarns
(54.01 to 54.06 55.09 to 55.11)
(54.07 to 54.08 55.12 to 55.16)
(52.04 to 52.07)
184,982,909
478,933,444
Cotton fabrics
(52.08 to 52.12)
35,446,481
212,673,136
Wool yarns
(51.07 to 51.10)
-
-
Wool fabrics
4,483
82,144
Silk yarns
(51.11 - 51.12 51.13)
(50.04 to 50.06)
1,182
377
Silk fabrics
(50.07)
-
-
Kneatwear
(61.09 to 61.10)
105,639,959
1,288,028,960
Socks and stockings
(61.15)
10,158,077
117,523,966
Man-made fibres fabrics
Source: Central Statistics Agency, processed
10. Imports of Various Textile Products: January - December 2012
(code NACE/CLIO)
Description
Man-made fibres yarn
HS – Code
Volume (in Kg)
Value (in US$)
128,847,516
405,174,034
111,289,320
859,066,762
Cotton yarns
(54.01 to 54.06 55.09 to 55.11)
(54.07 to 54.08 55.12 to 55.16)
(52.04 to 52.07)
26,475,829
106,793,526
Cotton fabrics
(52.08 to 52.12)
104,181,467
1,038,323,665
Wool yarns
(51.07 to 51.10)
-
-
Wool fabrics
986,079
20,621,748
Silk yarns
(51.11 - 51.12 51.13)
(50.04 to 50.06)
240,671
903,084
Silk fabrics
(50.07)
-
-
Kneatwear
(61.09 to 61.10)
2,995,655
41,749,683
Socks and stockings
(61.15)
465,684
4,179,392
Man-made fibres fabrics
Source: Central Statistics Agency, processed
Imports of Various Textile Products: January – December 2013
(code NACE/CLIO)
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Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
Description
Man-made fibres yarn
HS – Code
Volume (in Kg)
Value (in US$)
134,190,318
429,463,659
109,458,003
863,289,575
Cotton yarns
(54.01 to 54.06 55.09 to 55.11)
(54.07 to 54.08 55.12 to 55.16)
(52.04 to 52.07)
33,140,468
130,280,678
Cotton fabrics
(52.08 to 52.12)
101,069,434
1,048,876,525
Wool yarns
(51.07 to 51.10)
-
-
Wool fabrics
928,312
20,150,630
Silk yarns
(51.11 - 51.12 51.13)
(50.04 to 50.06)
245,181
745,655
Silk fabrics
(50.07)
-
-
Kneatwear
(61.09 to 61.10)
5,246,580
59,202,890
Socks and stockings
(61.15)
509,826
4,570,255
Man-made fibres fabrics
Source: Central Statistics Agency, processed
11. Value of Production: January – December 2010 and 2011
2010
2011
Growth (%)
Textile sector*
3,428,388
3,706,895**
8.12
Clothing sector
8,662,997
10,555,834**
21.85
Value (in 1000 US$)
Note: * Excl. Fiber and Spinning/ yarn
** Preliminary Figure based on production index from the Central Statistics Agency
12. Production Structure Change in 2012 - 2013 (Number of Mills and Annual
Production Capacity)
The data is no longer available from the Investment Coordinating Board (BKPM). As of 2008,
the BKPM no longer published the details of approved investment permits, but only presents
aggregate data for the entire textile sector (as presented in section 7 above). The total
number of companies in operation is as follows:
7
Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
Sector
Industry Description/
Sub-Sector
Fiber
Preparation of Textile
Fibers
Yarn
Manufacture of Yarn
Spinning
Spinning of Sewing
Yarn
Manufacture of Finished
Yarn
Fabrics
Manufacture of Ikat Woven
Fabrics
Manufacture of Finished
Textiles
Manufacture of Printed
Textiles
Manufacture of Batik
Textiles
Manufacture of Knitted
Textiles
Manufacture of Crochetted
Fabrics
Manufacture of Made-up
Textile Articles
Manufacture of Finished
Textile Embroidery
Manufacture of Crocheted
Fabrics & Embroidery
Manufacture of Other
Made-Up Textiles
Manufacture of Narrow
Fabrics
Manufacture of Pruduced
Fabrics for Industrial Uses
Manufacture of NonWoven fabric Items
Garments Manufacture of Other
Textiles N.E.C. (Garments)
Manufacture of Wearing
Apparel Made of Textile
Manufacture of Clothing
Accessories of Textile
Manufacture of Crochetted
Apparel
ISIC
Code
13111
No. of Mills
as of 2010
16
Annual Production
(in ‘000 IDR)
Rp 651,182,883
13112
121
Rp 17,626,978,797
13113
23
Rp 6,433,170,137
13131
61
Rp 32,311,277,158
13122
39
Rp 68,213,628
13132
154
Rp 10,044,113,451
13133
92
Rp 8,929,356,963
13134
418
Rp 1,223,931,640
13911
96
Rp 2,804,321,449
13912
43
Rp 58,400,400
13921
153
Rp 12,950,809,738
13922
50
Rp 19,423,511
13924
20
Rp 74,826,934
13929
22
Rp 626,361,218
13991
23
Rp 616,195,270
13992
4
Rp 68,875,589
13993
6
Rp 139,273,939
13999
1674
14111
22
Rp 277,984,821
14131
25
Rp 467,576,760
14302
77
Rp 39,243,344
Rp 38,892,160,004
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Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
Manufacture of Knitted
Apparel
Souce: Central Statistics Agency
13. Other Events
14301
27
Rp 764,350,742
Indonesia’s Textile Machinery Restructuring Program Continues
In 2012 and 2013, the Indonesian government through the Ministry of Industry has continued
to offer stimulus funds to textile entrepreneurs in the country to upgrade their textile
machines in a bid to raise the competitiveness of country’s textile and textile products
industry. Under the program, rebates and interest subsidy is given to textile companies for
upgrading of machinery and equipment. From 2007 to 2012, Rp. 9.9 trillion investment was
injected into the textile industry, as a result of which the production increased by 15-34%,
energy consumption was reduced by 5-9 %, and productivity rose by 6-10 %. In 2012 alone,
the Ministry of Industry has sanctioned a sum of Rp 145.5 billion for revitalizing machines in
textiles, leather and footwear industries.
According to the Indonesian Textile Association (API), in 2013 local textile makers have
spent Rp 1.5 trillion (US$154.84 million) to buy machinery, excluding land and buildings.
Most of the investments come from domestic firms, as investment by foreign firms stands at
20%. The figure is down 34.7% from the Rp 2.3 trillion textile makers spent on machinery in
2012, including Rp 500 billion in foreign investments.
The Industry Ministry stated that the textile sector faced two major problems in 2013. Firstly,
a 15% increase in electricity rates. Secondly, local textile makers said that the existing
customs regulations have hindered their growth. Indonesian textile makers also continue to
face fierce competition from imported goods. Over the past few years, there has been a
major rise in Indonesia’s textile imports from China. The prices of a wide range of textile and
textile goods have risen by 10 - 15%, as most of the textile firms in the country are
concentrated in the areas like Banten and West Java, which have been hit by sharp rises in
minimum wages.
Some 500 Indonesian Textile Mills need Machinery Revitalization
According to the Ministry of Industry, about 500 textile mills in Indonesia need revitalization
in order to enhance their competitiveness in the domestic and export markets. Some 500 of
the 1,500 textile and apparel factories in Indonesia are currently using machines that are 25
years old and are producing using outdated technology.
Indonesia is dependent on imports for textile machinery, which are mostly imported from
China, a major competitor of Indonesian textiles in the domestic and global markets. The
textile and clothing sector is a major contributor to Indonesia’s non-oil export earnings, and
hence the Government is seeking to invite opening of textile machinery factory in Indonesia.
The Indonesian Government would extend several benefits, including a 10-year tax holiday,
to the company investing in textile machinery production in the country. Currently, the
Government is studying the possibility of investment in textile machinery by Taiwanese and
Japanese companies.
9
Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
Indonesia Opened Dumping Probe on SDY from Four Nations
The Government of Indonesia has initiated anti-dumping investigation on import of spin draw
yarn (SDY), also called fully drawn yarn (FDY), from China, Malaysia, South Korea and
Taiwan. The probe is in response to a request made by two Indonesian manufacturers - PT
Indorama Ventures Indonesia and PT Asia Pacific Fibers.
After an initial analysis by the Indonesian Anti-Dumping Committee (KADI), there were
strong indications that SDY was sold at dumping prices, and thereby, causing injury to
domestic producers. The investigation was carried out on imports of SDY with tariff heading
5402.47.00.00, originating from China, Malaysia, South Korea and Taiwan. In 2012, China
exported SDY worth US$ 19.355 million to Indonesia, showing an increase of 418 percent
year-on-year in value, and 559 percent year-on-year in terms of volume, according to the
Chinese Customs statistics. Around 40 Chinese firms export SDY to Indonesia.
TUV SUD Opens Textile Testing & Certification in Indonesia
PT TÜV SÜD PSB, an internationally recognized testing body, in collaboration with PT
Qualis Indonesia and Nissenken has begun providing testing and certification facility for
international standards to the Indonesian textile and clothing industry. The new facility offers
comprehensive test services, including chemical, performance and regulatory testing, to
support softlines (textiles and apparels) manufacturers in complying with international quality
and safety requirements for their products. PT TÜV SÜD PSB sees a huge potential in the
textile industry in Indonesia and offering this services enables businesses to achieve higher
standards or gain quicker access to foreign markets.
In terms of certification, there are also many international standards that apply to textiles &
clothing manufacturers, specific to social compliance such as SA8000 and BSCI. Factory
and supplier audits are also necessary to ensure that quality is maintained at the sourcing
and manufacturing stages. By working with an independent third party testing and
certification body, textile manufacturers can be assured of end-to-end quality assurance.
PT South Pacific Viscose has become the World’s largest Viscose Fiber Plant
In late October 2013, trial operations of the fifth production line started successfully at
Lenzing’s Indonesian subsidiary PT South Pacific Viscose. With an additional nominal
capacity of 80,000 tons of viscose fibers p.a., the annual total capacity of SPV has increased
to 320,000 tons once Line 5 has been launched. SPV will thus exceed the capacity of the
parent plant in Lenzing/Upper Austria (250,000 tons p.a.) for the first time and therefore has
become the world’s largest viscose fiber plant.
Asia constitutes the most important market for the Lenzing Group, where more than half of
its fiber revenues are generated. Therefore more than half of its fiber production capacity is
now located in Asia.
Anhui to Set Up Textile Machinery Plant in Indonesia
10
Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
Anhui Conch Group Company Ltd. has expressed interest to invest in textile machinery plant
in Indonesia. The Anhui Conch Group has sought allotment of 150 hectares of land to build a
textile industrial park in the country, where a number of textile and textile machinery
industries can be set up.
The new investment would help domestic textile manufacturers to better take advantage of
the restructuring scheme for textile machinery launched by the Ministry of Industry. The
setting up of new textile machinery plant would help in modernizing textile machinery at
various plants across Indonesia, he said.
14. Expected Changes
Indonesia’s Machinery/ Equipment Restructuring Program of Textile and Textile Product
(TPT) Industry and Footwear Industry for the 2014 Budget Year
The Indonesian Industry Ministry has also pledged to raise the competitiveness of the
country’s textiles and apparels through the refurbishment of machinery and equipment,
which is already more than 20 years old must be rejuvenated or restructured by machinery/
equipment with more modern technology. The Government, through the Ministry of Industry,
considers it necessary to give stimulants through the activities of Machinery/ Equipment
Restructuring of Textile and Textile Product Industry as well as Footwear Industry in relation
to boosting the industry for better competitiveness through the investment in more modern
machinery/ equipment. The Machinery/ Equipment Restructuring Program of Textile and
Textile Product Industry which was launched by the Ministry of Industry in 2007 and the
Machinery/ Equipment Restructuring Program of Footwear Industry in 2009 have always
been welcomed by the industry. For 2014, the Government has decided to continue the
programs with a budget allocation of Rp. 106.5 billion and they are expected to give positive
impacts in form of the following:
1. Investment funding from Banking and Textile and Textile Product Industry as well as
Footwear Industry and Leather Processing Industry of Rp. 1.065 Trillion (US$ 90.25
million),
2. Employment creation for at least 8,000 people for Textile and Textile Product
Industry, Footwear Industry and Leather Processing Industry,
3. Efficiency improvement of energy use and production cost as well as producing
higher quality and more competitive products.
The legal basis, requirements, criteria, and registration procedures are as follows:
•
Technical Guidelines of Revitalization Program of Industrial Growth through
Machinery/ Equipment Restructuring of Textile and Textile Product Industry and
Footwear Industry.
•
Regulations of the Minister of Industry No. 01 Year 2014 on The Second Amendment
of the Regulations of the Minister of Industry No. 123/M-IND/PER/11/2010 on the
Revitalization Program of Industrial Growth through Machinery/ Equipment
Restructuring of Textile and Textile Product Industry and Footwear Industry.
11
Italian Trade Commission – Jakarta
Trade Promotion Office of the Italian Embassy
•
Regulations of Directorate General of Manufacturing Base Industry No.
01/BIM/PER/1/2014 on the Revitalization Program of Industrial Growth through
Machinery/ Equipment Restructuring of Textile and Textile Product Industry and
Footwear Industry.
Rise in Power Tariff will Push Up Textile and Garment Prices
According to the Indonesian Synthetic Fiber Producers Association (Asosiasi Produsen
Synthetic Fiber Indonesia - APSyFI), the planned increase in electricity tariff will push the
prices of Indonesian garments by up to 50 %, making the industry less competitive in both
domestic and export markets, which would in turn will affect the garment sector.
The government of Indonesia is planning to raise the electricity tariff, ranging between 38.9%
- 64.7 %, for large-scale industries from May 1, 2014, which is to be implemented in stages
over a period of 2 - 4 months.
APSyFI pointed out that with the rising electricity tariffs of I-3 and I-4 classes of industries by
38.9% and 64.7%, the cost of industrial production in the polyester industry would also jump
automatically, which would be passed on in a domino effect on the weaving, knitting and
garment industries, and the price of final product to consumers would rise by about 50%.
In addition to the rising prices of raw material, the spinning industry would also be affected
by the increase in electricity tariff. This affect would also spillover to the garment
manufacturing sector, causing the price of the finished product to go up by about 50%. This
condition would negatively impact the performance of the Indonesian textile and garment
industry, both in the domestic and export markets. The loss of competitiveness would mean
either shutdown or reduction in production, which in turn would impact the livelihood of
workers.
In 2013, exports of Indonesian polyester sector dipped 9% to US$ 464 million from US$507
million in the previous year. On the other hand, polyester imports grew 8% to US$416 million
from US$386 million worth of imports in 2012. Even the polyester industry’s share in the
domestic market fell from 83% to 79%, according to the data from the Central Statistics
Agency.
Additional Information Regarding the Upstream Textile Raw Material Sector
Indonesia is on Way to Self-Sufficiency in Petrochemicals
Currently, several petrochemical projects in Indonesia are under construction or expansion
and is on its way to become self-sufficient in the production of olefins such as ethylene and
propylene, aromatics and other petrochemical products by 2020. According to the
Indonesian Olefin, Aromatic and Plastic Industry Association (INAplas), the construction of
new petrochemical plants and the ongoing expansion projects would raise Indonesia’s
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current production capacity of 3.9 million tons per annum by 30-40% over the next 3-5 years.
It is hoped that Indonesia would not need to import petrochemical products after 2020.
Expansion is being carried out at five existing plants, all of which are located in Banten, West
Java. These include Japan-based Nippon Shokubai, which will raise its acrylic acid
production capacity; PT Polychem Indonesia, which has plans to increase mono ethylene
glycol (MEG) production; and PT Chandra Asri Petrochemical (CAP), which plans to
increase its naphtha cracker production capacity.
Additionally, there are seven new projects coming up in Indonesia, which include South
Korean Honam Petrochemical Corporation’s naphtha cracker facility in Banten. German
petrochemical company Ferrostaal Industrial Projects will work together with Chandra Asri to
build a methanol-to-olefin (MTO) plant in Papua. Most of the seven new projects, being built
at the cost of US$ 39 billion, are likely to be completed between 2017 and 2020. At present,
Indonesia has a petrochemical production capacity of 3.9 million tons, compared to the
national demand of 4.3 million tons.
Pertamina and PTTGC Public Company Limited Sign for Petrochemical Complex
PT Pertamina (Persero) and PTT Global Chemical Public Company Limited (PTTGC) have
signed the Manufacturing Joint Venture to pursuing the final investment decision of the
world-scale Petrochemical Complex in Indonesia targeting for commercial operation by
2018. Pertamina, the Indonesian State-Owned energy company, and PTTGC, the leading
Thai Petrochemical producer, have advanced its partnership and collaboration by entering
into the Manufacturing JV - HOA to proceed further with the feasibility study of the worldscale petrochemical complex. This collaboration advancement comes after the completion of
the extensive project preliminary feasibility study - a part of the partnership HOA signed in
April 2013.
This Manufacturing JV - HOA is aimed to further materialize the agreed joint venture
principles and investment scope, as well as enable both parties to finalize the project details
by early 2014 prior to conducting the detail bankable feasibility study and Front End
Engineering Design (FEED). Pertamina and PTTGC have reached the project definition
understanding, including a common goal and objective, a competitive investment model and
appropriate site specification, as well as each party’s strength to be leveraged for building
JV’s competitiveness. This will move forward for final investment decision, anticipated in
2015.
In addition the exhaustive Indonesia polymer market survey has been jointly conducted
through the distribution and marketing activities of both parties, where the initial complex
configuration has been defined and technical study of such investment scope has been
assessed, assuring the parties aspiration in being part of an Indonesian self-sufficient
society.
Meanwhile, the domestic demand for petrochemical products is expected to increase, due to
the positive trend of manufacturing sector. Indonesian petrochemical market value is
expected to reach US$ 30 billion in 2018 and the JV Company is targeting to control 30% of
market share after the Petrochemical Complex commercially operates in 2018. Currently, the
production of petrochemical in Indonesia is still insufficient to meet the downstream industry
needs, creating large import to the amount of US$ 5 billion per year.
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Titan plans Naphtha Cracker Project in Indonesia
Aiming to expand presence in the petrochemical space, Indonesia’s biggest polyethylene
producer, PT Titan Kimia Nusantara Tbk plans to construct a naphtha cracker complex near
its industrial plant in Merak, Banten. The firm intends to spend around US$ 3-5 billion on the
construction of the new facility with a projected ethylene production capacity of 700 kilo tons
per annum (KTA) and propylene production capacity of 500 KTA.
Originally the construction was to be launched in 2014, however due to problems in
acquisition of land for setting up the plant, this has now been pushed back to 2017, while the
date for launching operations has been pushed back from early 2016 to early 2018.
The firm plans to obtain around 60% of the equity for the new facility from South Korea’s
official export credit agency - Korea Eximbank (KEXIM) and the rest from its holding firm
Lotte Chemical Titan International Sdn. Bhd. Lotte Chemical Titan International Sdn. Bhd.
holds a 95.31% stake in Titan Kimia, while the rest of 4.69% is held by the public.
In 2013, Titan Kimia achieved 352 kilo metric tons (KMT) polyethylene production levels,
which is the highest level attained since launch of operations by the company. However, this
could not save the firm from incurring a net loss of US$ 16 million. The firm has been posting
negative results since 2010, when it last booked a profit of US$ 23 million on account of
enhanced sales and consumer base.
PT Chandra Asri and Ferrostaal Sign Deal for PP and Ethylene Plant
Indonesia’s largest petrochemical firm PT Chandra Asri and German company Ferrostaal
Industrial Projects GmbH have signed an agreement to set up a methanol-based olefin
production complex in Indonesian province of West Papua. The complex, to be set up in
Teluk Bintuni region will have an annual capacity to produce up to 400,000 tons of
polypropylene (PP) and 175,000 tons of ethylene.
The construction work for the US$ 1.89 billion project would start after completion of the
feasibility studies as well as the decision on gas prices and allocation from the Ministry of
Energy and Mineral Resources. The Tangguh liquefied natural gas (LNG) plant in West
Papua is expected to supply gas for the petrochemical complex, which however is expected
to be completed by 2019.
The Indonesian Government is currently focusing on development of the petrochemicals
sector, along with other sectors, for industrial growth. The growth of petrochemical sector is
expected to decrease the country’s dependence on imports of propylene, ethylene,
polypropylene and methanol. In 2012, Indonesia imported petrochemicals worth US$ 8.5
billion from several countries, including Singapore and Thailand.
BP fully Acquired PTA Producer PT AMI
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BP completed the purchase of all interests previously held by Japan’s Mitsui Chemicals, Inc.
(MCI) and Mitsui & Co. Ltd. (MBK) in PT Amoco Mitsui PTA Indonesia (AMI). For over fifteen
years, AMI was a 50/50 joint venture between BP and its partners, producing and marketing
purified terephthalic acid (PTA) in Indonesia, where domestic demand for PTA has been
growing at around 6% over the last few years.
Effectively as of 1 March 2014, AMI has become a wholly owned subsidiary of the BP group.
AMI has its head office in Jakarta, and a manufacturing site at Merak, Cilegon, Banten
Province in Indonesia.
15. New Laws and Regulations for the Textile Industry Enacted in the Period Taken
into Consideration
From 2012 - 2014, three new regulations for the textile industry were enacted:
•
Regulations of the Minister of Industry No. 01 Year 2014 on the Second Amendment
of the Regulations of the Minister of Industry No. 123/M-IND/PER/11/2010 on the
Revitalization Program of Industrial Growth through Machinery/ Equipment
Restructuring of Textile and Textile Product Industry and Footwear Industry.
•
Regulations of Directorate General of Manufacturing Base Industry No.
01/BIM/PER/1/2014 on the Revitalization Program of Industrial Growth through
Machinery/ Equipment Restructuring of Textile and Textile Product Industry and
Footwear Industry.
•
Decree of the Ministry of Industry of the Republic of Indonesia Number: 15/M-IND/
PER/2/2012 on the amendment of the Decree Number 123/M-IND/PER/11/2010 on
Revitalization program and Industrial acceleration through textile machinery
restructurization/textile industrial equipment and textile product and Footwear
Industry.
16. Tenders in the Period Considered, Indicating Details of the Tender and a Brief
Illustration of the Object)
In the publicly announced tenders in the period of 2012 and 2013, none covered in the textile
industry.
17. New Joint Ventures between Textile Producers or Textile Machinery Manufacturer,
if any (specify Partners and Object)
Based on data from the Data Center of the Ministry of Industry, in 2012 and 2013 no new
textile machinery component manufacturers were established. With regard to new textile
manufacturers, as of 2008, the BKPM no longer publishes the details of approved investments
permits, but only presents aggregate data for the entire textile sector. The Manufacturing Directory of
the Ministry of Trade lists the following 15 textile machinery manufacturers:
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No.
Company Name and Address
1. AROUND STAR, PT
Address: Jl Cilampeni No 12 A Rt 02/05,
Bandung, Jawa Barat
Phone. 022-5891677
2. ARUKINDO, CV
Address: Krajan Ii Rt 06/rw 04, Karawang,
Jawa Barat
3. ASAHI CIPTA PRIMA, PT
Address: Ki Jababeka Blok Oo No.3d,
Bekasi, Jawa Barat
Phone. 8937311
4. BENGKEL MESIN GARUDA
Address: Jl.komud Supardio No3, Bandung,
Jawa Barat
Phone. 022-6031303
5. HORIGUCHI ENGINEERING INDONESIA
Address: Kawasan Industri K11c Lot D- Ia,
Karawang, Jawa Barat
Phone. 8901612
6. INTEX MESIN INDONESIA, PT
Address: Kawasan Dwipapuri Kav M-11,
Sumedang, Jawa Barat
Phone. 022-7792158
7. MITRA LESTARI SEJATI, PT
Address: Jl. Bojong Buah Raya No.15,
Bandung, Jawa Barat
Phone. 5892419
8. PRAKARSA SETIA GEMILANG PT
Address: Jl Moh Toha No 382, Bandung,
Jawa Barat
Phone. 022523091
9. SAHABAT KERJA, CV
Address: Ds. Tegal Rejo Rt 01 Rw 08,
Klaten, Jawa Tengah
Phone. 0272-551233
10. SETIA ABADI LOGAM, PD
Address: Jl. Griya Buaran Indah, Kradenan
III No.1 A, Pekalongan, Jawa Tengah
Phone. 0285-425058
11. SIMPLETEX MCHINERY IND, PT
Address: Jl. Cibaligo No 169, Kota Cimahi,
Jawa Barat
Phone. 0226033735
12. SPARTA
Address: Jl.Raya Dayeuhkolot No.170,
Bandung, Jawa Barat
Phone. 022-5205044
Products Manufactured
Knitting Machines
Parts of Weaving Machines
Textile Machinery Components
Auxilliary Textils Machines and
Lathe Machines
Textile Machinery Repair
Dyeing & Finishing Equipment
Rotary Screens
Textile Machines
Spare Parts of Textile Machinery
Weaving Machines
Textile Machines
Repair of Textile Machines
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13. SUGIH MUKTI,PT
Address: Jl.cigending No.679, Bandung,
Jawa Barat
Phone. 7800008
14. TAUFIK JAYA TEKNIK, CV
Address: Jl. M. Bisri 88 Gedebage Wetan,
Bandung, Jawa Barat
Phone. 022-7561814
15. TRIMUDA PUTRAMA, PT
Address: Jl Cibaligo 167 Km 1,7, Kota
Cimahi, Jawa Barat
Phone. 022-6032650
Spare Parts of Textile Machinery
Spare Parts of Textile Machinery
Textile Machinery
Up to now, Indonesia only has one integrated producer of textile machinery, i.e. PT Texmaco
Perkasa Engineering of the Texmaco Group. The company produces air-jet and water-jet
weaving machines, rapier shuttle-less looms, seizing machines, printing machines, stenter
machines, dobby machines, steamers and spare parts, mainly for the group’s own
operations and partly for exports. The machines are produced with the technology of MS
Machinery from Italy, ICBT from France and Draper Inc. of the US.
PT Texmaco Perkasa Engineering
Head Office: Jl. H.R. Rasuna Said Kav. X.6
Phone: 002-12520656, Fax: 002-15225738
Factory Address 1: Kiara Payung Klari, Klari 41300 – West Java
Phone: 0267-431645, Fax: 0267-432312
Factory Address 2: Jl. Raya Kaliwungu Km 19, Kaliwungu – Central Java
Phone: 0294-81253, Fax: 0294-81861
Headcount: 2247
Contact Person: Anang Sukantono (HRD Manager)
Email: mustofa@perkasa.co.id
Perkasa Heavyndo Engineering, PT (Subsidiary)
Product: Weaving Machines
Office Address: Jl. H.R. Rasuna Said – Jakarta
Factory Address: Jl. Raya Kaliwungu Km.19 – Kaliwungu 51372 – Central Java
Phone: 024-660055, Fax: 024-6600271
Headcount: 337
Contact Person: Nurcholis Habib (HRD Manager)
18. New Textile Machines Agencies
Records at the Ministry of Trade indicate that no new textile machine agencies were
established in 2012 and 2013. Information was obtained that in many cases existing textile
machinery agencies have broadened their variety to include more brands.
19. New Trading Companies
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The data is no longer available from the Investment Coordinating Board. As of 2008, the
BKPM no longer publishes the details of approved investments permits, but only presents aggregate
data for the entire textile sector.
The Ministry of Trade publishes directories of trading companies in operation, but do not provide lists
of new textile trading companies.
20. New Engineering Companies
Data from the Ministry of Industry, Ministry of Trade, and the Indonesian Investment
Coordinating Board indicate that no new engineering companies in the field of textiles were
established in 2012 and 2013.