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Imported T-Shirts and Campaign Displays Raise Concerns

BULETIN TEKSTIL.COM/ Jakarta – The 14 February 2024 election is regarded by the textile and apparel industries as a favorable occasion. T-shirts are a fundamental product for both large and small apparel and textile manufacturers. As a form of campaigning, election participants will produce an extensive quantity of T-shirts through printing. Pretense calculations do not invariably correspond to actuality.

The election’s economic repercussions on the domestic textile and textile products (TPT) sector are relatively insignificant.

Jemmy Kartiwa Sastraatmaja, chairman of the Indonesia Textile Association, stated that the election’s economic impact on the domestic textile and textile products (TPT) industry was minimal. Calculating is straightforward. From one kilogram of material, five T-shirts can be produced. The quantity of material needed to produce 50 million t-shirts is 10 million kilograms, which is equivalent to 333,333 kilograms of polyester.

Daily domestic production of polyester amounts to 4,000 tons. The domestic industry may experience a mitigated effect if election participants purchase T-shirts manufactured in China at higher prices compared to those available in India.

Teten Masduki, the Minister of Cooperatives and Small and Medium Enterprises, stated that business actors involved in campaign decorations, such as confections, would not experience any economic repercussions, as previously reported by Kompas. Businesses operating within the culinary sector experience the relative economic impact.

“According to my inquiry with the confectionery company, the campaign party attire does not appear to be manufactured in this country,” stated Teten Masduki, minister of cooperatives and SMEs.

When queried about the likelihood that this indicated the product was imported, Teten responded that such a scenario was conceivable. “Perhaps, certainly. “I checked with manufacturers who used to produce campaign props, such as flags, banners and t-shirts two or three years ago, but no one makes them domestically,” according to him.

The Ministry of Industry (Kemenperin) stated in July 2023 that the textile industry continued to contract despite the Indonesian Purchasing Managers Index (PMI) for June 2023 increasing from 50.3 in May 2023 to 52.5, as reported by S&P Global. The European Union (EU) and the United States (US) experienced a decline in market demand. In an effort to curb inflation, both the European Union and the US Central Bank persist in increasing benchmark interest rates. Multiple sources indicate that households in the United States have begun to conserve funds since the government discontinued financial assistance during the Covid-19 pandemic.

During the period of January to April 2023, Indonesia’s TPT exports decreased by 28.44 percent, or $3.7 billion, compared to the same period the previous year. Conversely, the textile sector is among the greatest consumers of labor, absorbing approximately 2.9 million individuals, or nearly 20 percent of the workforce.

President Joko Widodo issued a directive to redirect TPT products that were originally intended for export to the domestic market. Despite this, the domestic market is inundated with inexpensive imported goods, particularly those from China, which are overproduced and include products from fashion brands, as a result of the deterioration of the US and EU markets.

The findings of an international survey conducted by the management consulting firm McKinsey & Company among participants in the fashion industry indicate that the year 2024 remains uncertain. According to the Business of Fashion-McKinsey report State of Fashion 2024, consumers in the principal markets of the United States, Europe, and China are not yet entirely willing to purchase fashion items for various reasons. The fashion industry will expand by 2% to 4% worldwide. The luxury fashion product sector will continue to experience greater growth than the non-fashion apparel industry.

High benchmark interest rates in the United States will begin to have a gradual abatement by the end of 2024 or the beginning of 2025. There is optimism that American consumers will resume spending on secondary necessities, such as apparel, in light of the low inflation rate. Meanwhile, TPT faces environmental challenges in its pursuit of market entry into the European Union. Among other requirements is the prohibition of the use of fossil fuels in production. It has been ascertained that the fiber utilized in viscous substances does not originate from deforestation.

As per the findings of Jemmy Wijaya, the feeble domestic market is presently impeding the utilization of textile industry machinery from upstream to downstream, which stands at less than 50 percent. It is possible to stimulate domestic consumption by prohibiting the importation of goods priced at an absurdly low level. Government protection of the domestic market can ensure equitable competition. A method is to inspect products at the frontier rather than at the point of entry.

It is imperative that the government give due consideration to the sustainability of this industry. For domestic fashion brand products to establish a foothold among the middle class, assistance from upstream to downstream is necessary. Moreover, among Muslims, modest fashion has an enormous market.

Indonesia is experiencing a period of demographic advantage. Productivity must be increased in this industry via innovation, mastery of cutting-edge technology, and a productive workforce.

(Red -B Teks/ Ly)

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