Textile Industry Optimistic Labor Absorption Reaches 150,000 People This Year

A number of textile and textile product (TPT) companies have committed to invest around US$400 million at the beginning of this year. The initial investment commitment is estimated to be able to absorb 150,000 new workers by 2022.

Chairman of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI) Redma Gita Wirawasta said the textile industry would invest a lot due to increasing demand from domestic and international markets.

Redma said a number of companies had reinvested in the fourth quarter of 2021 for fabric and yarn production. The investment at that time, he said, was to meet the needs of the domestic market, which was abandoned by imported products or substituted for imported goods.

“Several companies from upstream to downstream have made commitments. Estimated additional workforce could be around 20,000 people. If it is added with small and medium industries, it can reach around 150,000 people," said Redma, Sunday (30/1/2022).

He said the relatively high projection was due to the positive market demand. On the other hand, the import substitution program pushed by the government has also been effective in leveraging the performance of the domestic industry during the economic recovery period due to the pandemic.

"In 2022, a lot of investment will be made as market demand begins to improve and the import substitution program is promoted by the government according to the president's orders," he said.

Meanwhile, the contribution of the textile industry to the gross domestic product (GDP) of the manufacturing sector was 6.08 percent in the third quarter of 2021. Meanwhile, the growth of the textile industry on a quarterly basis also improved to 4.27 percent (q to q) when compared to the previous quarter. II-2021 by 0.48 percent.

In fact, textile exports in the January-October 2021 period also increased by 19 percent to US$10.52 billion, in addition to the investment value which also increased by 12 percent to Rp5.06 trillion.

Previously, the Ministry of Industry (Kemenperin) was optimistic that the absorption of labor in the non-oil and gas processing industry could meet the target of reaching 20.84 million people this year. The target is up 11.80 percent from the 2021 score at 18.64 million people.

Spokesman for the Ministry of Industry, Febri Hendri, said the non-oil and gas manufacturing sector continued to expand after the pandemic spike in mid-2021. According to Febri, investment in this sector will begin to grow significantly in the fourth quarter of 20221.

During January–September 2021, the realization of investment in the manufacturing sector was recorded at Rp. 236.79 trillion. This figure is up 17.3 percent when compared to the realization of investment in the same period in 2020 of IDR 201.87 trillion.