The textile and textile product (TPT) industry in Indonesia has experienced significant shocks from the end of 2022 to 2023. The Indonesian Fiber and Filament Yarn Producers Association (APSyFI) reported that as many as 1 million employees had been laid off or affected by a wave of layoffs (PHK) in that period. The main cause is the decline in production capacity utilization which continues to occur in a number of factories.
The General Chair of APSyFI, Redma Gita Wirawasta, projects that in the second quarter of this year, utilization of the textile industry could increase to 55%, with an estimated workforce absorption of 100,000 people. This optimism was triggered by the government's policy in regulating import traffic through Minister of Trade Regulation (Permendag) No. 36/2023 which will come into effect on March 10 2024.
According to Redma, the absorption of new workers will occur mainly in the downstream textile industry which produces ready-made clothing, especially in order to fulfill orders ahead of the Eid celebrations. Thus, the projected workforce absorption could reach 500,000 people by the end of the year.
However, the challenges for the textile industry are still not over. The flood of illegally imported clothing products on the domestic market is a serious problem that has caused the industry to decline even further since 2022. General Chair of the Indonesian Textile Association (API) West Java, Ian Syarif, noted that the value of illegal imports reached US$2.9 billion per year. Import regulations through Minister of Trade Regulation no. 36/2023 is expected to control the flood of illegally imported products, with an estimated reduction of up to 50% or the equivalent of 1.5 million pieces of clothing.
With the new import regulations, the domestic textile industry is starting to experience a bit of a breath of fresh air. However, further steps must continue to be taken to maintain the sustainability of this industry. Business actors, government and related stakeholders must work together to create a conducive environment for the growth of the textile industry in Indonesia.
In conclusion, even though there is a projected increase in utilization and employment in the textile industry this year, challenges still lie ahead. Appropriate policies and close cooperation between the government, business actors and other related parties are the keys to overcoming this problem and ensuring better sustainability of the textile industry in the future.