The last three-month pandemic has resulted in a 90% decrease in production utilization leading to a permanent closure in September of 50% of textile factories in Indonesia. The Indonesian Textile Association (API) announced that there is only 10 per cent left to use large industrial production. That lowers the financial position of the industry to run low. The API predicts the industry will last until next September only.
The pandemic had launched export markets and domestic products. As a national strategic industry that requires a large workforce, this industry needs serious attention from the government. Therefore, in order to ease business, some entrepreneurs have asked for assistance in the form of easy banking loans, postponed payment of electricity tariffs during April-September and provided Corporate Tax PPH tax relief for 2020.
Since output has been disrupted in China, the association has noted about 17 containers of textile products originating in China. With illicit smuggling, the number has increased. Some of the items are finished goods, thus the selling of goods is becoming increasingly difficult for domestic industries. The weak demand for textile goods exacerbates the situation. China is Indonesia’s biggest exporter of textiles and textile (TPT) goods. The number of Chinese TPT imports reached 4,392 tonnes in 2018.