The Indonesian textile industry’s Q1 2009 results indicate that the industry may soon bounce back as the domestic demand remains strong owing to the government’s immense efforts.
According to an organization, Indonesia’s textile exports during January-April 2009 enlightened the hopes of revival in the textile industry in the coming months. Although the textile exports plunged during the first quarter, that was at a relatively slower pace than the previous quarters.
The alumni union of the state-sanctioned Textile Technology Institute (ITT-STTT) revealed that the quarter-to-quarter exports figure was better in comparison to 19% decline recorded from the third to the final quarter of 2008. The exports of textile products slumped 3.47% in the first quarter of 2009 from the last quarter of 2008.
However, the satisfactory thing was that the domestic demand for textiles managed to post a year-on-year increase of 25% during the first quarter of 2009, i.e. 67,500 Tons increase over January-March 2008, partly backed by the legislative elections.
Previously, the textile industry in Indonesia was suffering from the worldwide economic recession that led the major importing nations to slash their textile demands.
According to industry experts, the domestic demand is supporting the Indonesian textile industry, especially at present when the country’s currency is appreciating. From January 2009 onwards, textile companies in the country have been manufacturing their usual textile volumes. Moreover, prospects are even healthier for the companies which are already concentrating on the local market.
Besides, the government has taken a number of initiatives so that the domestic demand continues to offset the loss incurred by declining exports. For instance, it has started a program called “I Love Indonesia” to promote the locally manufactured goods and services among the Indonesians.
A program is also being carried out by the Industrial Ministry under which some selected textile manufacturers will get a government subsidy after securing bank loans to upgrade and change their production machinery.
In addition to this, the member countries of the Association of Southeast Asian Nations (ASEAN) are making efforts to boost the textile and garment industries of the region as well as to retain or increase the competiveness, stated the government.
According to a Research Analyst at RNCOS, “The textiles exports from Indonesia saw a decline in value during January-March 2009; however, the fall was comparatively less. Consequently, hopes have increased for the upsurge in the coming months. With overseas demand is still dormant, manufacturers are focusing on domestic market, gaining full support from the government initiatives to promote the sales of locally manufactured goods.”
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