Man: Help Mr Minister

Hand made of textile rolls reads 'National Textile Industry',

Indonesian textile manufacturers are still struggling against a flood of imported goods according to the Ministry of Industry, which recently launched its monthly industrial confidence index that measures the manufacturing sectors' confidence in the economy.

An index of 50 or more means that the manufacturing sector remains expansive while a reading below the 50 mark means the industry is facing a contraction. Indonesia managed to secure a 52.48 on the September reading, marking a slight increase from the 52.40 posted the previous month.

Ministry of Industry spokesperson Febri Hendri Antoni Arief told reporters on September 30 that the textile sector had not fully bounced back from the rush of imported goods that entered the country, both through legal or illegal means. Although the textile sector's confidence index exceeded 50 points, it had been facing a contraction since May.

"Even so, the overall textile industry has yet to recover since the flood of imported goods. These massive imports are starting to take a toll on the apparel sub-sector... Apparel makers book an expansive [confidence index], but [their index scores] have been on a downward trend", Arief said at a news conference.

He also warned that the soaring imports could deal a more fatal blow on apparel businesses outside the so-called "bonded zones".

Arief said that the industry had been getting fewer export orders and this may prompt manufacturers in bonded zones to consider placing originally export-bound goods in domestic markets. This makes them an extra rival for the companies outside the bonded zones.

"Because not only do they have to cope with the imports, businesses have to compete with [the originally export-bound] goods from the bonded zones", said Arief.

The Indonesian textile industry has been under media spotlight of late over a wave of mass layoffs.

According to the Ministry of Labour, as of July 42,863 people were laid off so far this year. As many as 22,356 worked in the processing industry, which includes textile, garment and footwear manufacturers. The wave of job cuts has been blamed on Chinese textile imports which are cheaper than their local counterparts.

[Based on a Jakarta Globe article on October 1 titled "Flood of imports still haunt Indonesia's layoff-hit textile industry".]