Garment sector will soon dominate Indonesian textiles industry
Balasubramanian P, CEO of PT Texcorp International talks about the current state of the Indonesian textile, fibre and feedstock industry; the major challenges faced by these industries; his solutions for overcoming these challenges; and his outlook for these industries in an interview with fibre2fashion.com
What is the size of the textile manufacturing industry in Indonesia?
Indonesia is a major textile manufacturing country, and is still dominated by the spinning, knitting and weaving industries. It is also one of the major polyester fibre producing countries. Of late, downstream industries (like garments) have been coming up, and those are likely to dominate the composition of the national textiles industry in the near future. In case of spinning (the area we are specialised in), there are roughly 10 million working spindles and the number is gradually increasing. Many factories are modernising to increase their competitiveness.
Where does Indonesia stand in the man-made fibres industry?
Indonesia is a major man-made fibre producing country. With nearly a dozen polyester fibre producers, it is the second biggest polyester fibre producer (next to China). It is also home to the biggest rayon producers: SPV (Lenzing Group) and IBR (Birla Group). In addition to domestic fibre producers, major mills are also importing huge quantities of polyester and rayon fibres from China, Thailand and India. Indonesia's strength remains being the world's biggest supplier of synthetic yarns, fabrics and garments. At the same time, Indonesia still produces good-quality high-end cotton and cotton blended yarns and fabrics.
Please rate Indonesia in textile feedstock production on a scale of 1 to 10.
It is an interesting question, but I'm not good in maths - so I prefer to skip on the scoring part. Specific to the spinning industry, Indonesia has abundant raw material supply for polyester yarn manufacturing. But it has a shortage for rayon fibre. Even with imports from countries like Thailand and China, currently it is facing a shortage of rayon fibres. But soon, one more factory will start producing rayon fibre in Indonesia. With that addition, I'm sure Indonesia will soon be self-sufficient in rayon fibre requirements. The real issue comes from cotton fibre availability. Indonesia doesn't have any local cotton fibre. Whatever is used by spinning factories has to be imported. So mills are forced to focus on specific items like contamination-free cotton yarn.
What are the five main problems that plague the textiles industry in your country, and what steps are being taken to address those?
According to me:
1. The steep hike in electricity costs has forced many factories to stop production during the peak-hour surcharge period.
2. Increasing labour costs especially in Jakarta or West Java area are forcing factories to shift operations to Central or East Java where wages are comparatively low.
3. Non-availability of locally-produced cotton fibre is forcing mills to import raw cotton, and to keep stock at their godown for a minimum period of 3-6 months. If cotton prices go down across the globe, then that results in direct losses for most factories.
4. Huge devaluation of the Indonesian rupiah created big problems for domestic industries as they had to import raw materials like cotton fibres and manufacturing machines in dollars. So, expansion or modernisation has become expensive now than a year ago.
5. Lack of infrastructure in cities of Java island is increasingly making it crowded; and in cities like Jakarta and Bandung, traffic jams have become a daily routine.
Which are the countries that you export to mostly? Which new markets look promising?
Our major export destinations for synthetic yarn are Latin American countries like Brazil, Peru and Colombia. We also export to the US and Italy. For us, China is the focus market for cotton yarn. Due to a recent slow-down, cotton yarn exports to China have dropped. But we are hoping for its revival.
Published on: 18/06/2015
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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