There hasn’t been much in the way of good news regarding the manufacturing sector in Indonesia in recent years, particularly with Chinese goods flooding the market and outperforming local products.
However, this past year has been particularly forward-looking for the apparel manufacturing sector. News of factory openings, growth in apparel exports, and new investments has been making the rounds, and a new labor law was passed by parliament earlier this month.
President Prabowo Subianto has been proactive in announcing plans for a more dynamic role for the industry this year. According to his directives, the government is looking at establishing a new state-owned enterprise while working with Danantara, a sovereign wealth fund, to invest in the industry.
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The industry employs around 4 million people, while exports are worth approximately $12 billion, attributable to $3.1 billion in textile exports and $8.7 billion in apparel exports.
“There is still room for expansion,” said Coordinating Minister for Economic Affairs Airlangga Hartarto, speaking about the possibilities for expansion and investment earlier this year. “We will rebirth the industry in the midstream,” he said, adding that fabric production, yarn manufacturing, printing, dyeing and finishing have been “somewhat disconnected.”
“We see textile factory utilization still at around 75 percent,” he pointed out.
35 percent a year earlier.
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