The national textile and textile product (TPT) industry is expected to receive new investments in the near future. However, the entry of new investments does not necessarily mean that the existing problems within the domestic TPT sector will be resolved instantly.
According to the Director General of the Chemical, Pharmaceutical, and Textile Industries (IKFT) at the Ministry of Industry, Taufiek Bawazier, around three to four foreign companies have expressed interest in building a Mono Ethylene Glycol (MEG) plant in Kalimantan. MEG is a key raw material for polyester yarn used in textile production. Currently, about 90% of Indonesia's MEG demand is still met through imports. However, Taufiek has not disclosed the identities of the potential investors in the TPT sector.
Redma Gita Wirawasta, Chairman of the Indonesian Filament Yarn and Fiber Producers Association (APSyFI), confirmed that despite the challenges, the national TPT industry remains attractive to foreign investors. Two months ago, APSyFI communicated with the Taiwan Textile Federation regarding the potential relocation of textile factories from China to Indonesia. However, the investors have set several prerequisites that may be difficult to fulfill. Previously, Redma stated that one of the investors demanded a gas price of around US$6 per MMBTU as part of the implementation of a green industry.
Additionally, APSyFI has been in discussions with a new Chinese investor planning to establish a filament yarn texturizing plant in Indonesia. This investor is even preparing to begin employee recruitment soon.
Danang Girindrawardana, Executive Director of the Indonesian Textile Association (API), emphasized that new investments are inevitable and cannot be prevented. API views the arrival of new players as a positive development that can stimulate investment in the upstream, midstream, and downstream segments of the national TPT industry. However, API also urges the government to ensure that new investors receive the same policy treatment as existing players to maintain fair and healthy market competition.
Despite these potential investments, industry challenges remain. Danang pointed out that new investments alone will not immediately solve the deep-rooted issues in the national TPT industry, which has been struggling since the implementation of the import relaxation regulation under Minister of Trade Regulation No. 8/2024. He argues that no sectoral policy will be effective in revitalizing the domestic industry as long as the liberalization of finished product imports continues.
Redma echoed this sentiment, stating that new investments will not compensate for the large number of TPT industry workers who have lost their jobs in recent years. Many companies have already shut down, with APSyFI reporting that 60 local TPT companies have faced significant challenges over the past two years. Of these, 34 companies have ceased operations entirely, while the remaining 26 have resorted to workforce reductions and relocations.
While new investments may bring hope to the industry, their success will depend on fair policies, a stable economic environment, and a commitment to supporting the existing domestic players.