Interview with Zahid Nazir

Zahid Nazir
Zahid Nazir
Head - Sales
PT Argo Manunggal Triasta
PT Argo Manunggal Triasta

Speed & right-first-time concern to many mills
Headquartered in Indonesia, integrated textile company PT Agro Manunggal Triasta, manufactures high quality textiles from cotton and cotton-polyester or mix. Fibre2Fashion spoke to Zahid Nazir, GM - sales & marketing, PT Agro, to understand how the Indonesian textile industry is braving challenges like the US-China trade war, currency depreciation and the pandemic.

What are the national and international trends in yarns and readymade fabric? Can you name a few?

There is more demand for eco-friendly fabric. The demand ranges from recycled polyester, organic cottons, fair trade cotton and a number of sustainable fabric. Stretch fabric and light weight fabrics are also the favourite. We also feel that there will be more requirement for health friendly products like anti-bacterial, anti-fungus fabrics among others in future.

What are the challenges the Indonesian textile industry faces today? How is government coming in support of the industry?

Traditionally, Indonesian textile mills are used to mass production with repeated items. This has drastically changed due to market demand. Machineries are outdated causing low productivity. We are also hit with illegal imports of low priced fabric causing a price strain. A number of mills do not have proper waste water management. Finding skilled worker is a challenge in this field. R&D is one area that needs a lot of improvement. We need to be inventors rather than following the market demand. Speed and right-first-time are also a concern to many mills. 

The government has imposed strict policies for illegal imports. Incentive plans for upgrading machines have also been provided. Continuous engagement between the government and textile mills for competitive energy prices, port fees, logistic cost and tax incentive has taken place. Banks are also lobbied to remove textile notion as a "sunset industry". This has been successful with some loans provided.

Cotton production in Indonesia is declining year after year. Is this having a serious impact on cotton yarn exports from Indonesia?

The local market in Indonesia is very large, compromising many fibre segment. Lately rayon and poly/rayon are in demand due to hand feel advantage and increased uniform business. Cotton is still a favourite for shirting and casual bottoms. A number of cotton spinners have reduced capacity due to high cotton prices in a stressed market. To compensate they switch to spun polyester or rayon/viscose which have less price volatility.

What impact has the US-China trade war and the currency depreciation had on Indonesian textile business?

A number of well-known brands have indicated their desire to relocate production to Indonesia. The challenge has also been the price. The biggest advantage for Indonesia is that we have a large vertical setup from spinning, weaving, processing all the way to garment making. The US-China trade war has not directly benefited Indonesia in the short term, but I believe in the long run, Indonesian mills will be more competitive and can enjoy a surge in sales. The competition will be from neighbouring Cambodia or Bangladesh. The impact of currency depreciation is not that significant as a number of chemicals/raw material or fibres are imported with US dollar rate. 

How is the textile industry impacted with the current onslaught of Coronavirus? What measures is the industry taking?

The coronavirus pandemic has been a game changer to many industries. In Indonesian textile industry, we see a big drop in demand in both domestic market and exports. Retail sales were hit hard impacting deliveries of ready-made products. However, the mills have been resilient in adapting to changes. Many started to convert production to health related products including masks, medical gowns, hospital wear etc. 

Factories are trying to streamline their work force, work more efficiently, focusing on products' strengths rather than follow the market demand. It is also a good time to streamline the supply base.
Published on: 05/05/2021

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

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