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Textile Industry Challenges in 2024

BULETIN TEKSTIL.COM/ Jakarta -In 2024, the textile industry sector will continue to confront many obstacles. According to M. Rizal Taufikurrahman, head of the Center for Macroeconomics and Finance Indef, these difficulties will affect the company’s plan for implementing various efficiencies, like personnel reduction.

More precisely, Rizal said that both domestic and foreign obstacles had the greatest influence on the textile and textile product (TPT) business.

He claims that local MSME products are not readily absorbed in the global market because to import limitations in a number of other countries. On the one hand, the issue of the overabundance of imported goods in the domestic market remains unresolved.

“Indeed, demand for goods from labor-intensive industrial products is decreasing in the export market, especially related to competitiveness issues, in the domestic market it is weak due to many imported goods, both legal and illegal, being able to dominate the domestic market,” Rizal stated in the IDXChannel Market Review.

He asserts that these circumstances can have a detrimental effect on Indonesia’s employment market. The influence of business efficiency, which resulted in lost markets and orders, led to an increase in the unemployment rate.

“I think of course there must be a regulation to tighten the entry of imported products, the government must be aware of saving domestic industry and increasing the competitiveness of our industry,” Rizal remarked.

“This year is quite enough for labor-intensive industries, both in TPT, especially TPT, it is very difficult, because imported products are still overwhelmingly flooding domestic ones, labor-intensive industries find it difficult to compete,” he said.

Aside from that, the government should also be concerned about modifications to certification requirements made by import destination nations. Take the EUDR, for instance, which forbids the entry of products that have been determined to be harmful into the European Union.

“Apart from that, the government must respond to changes in the policies of importing countries, for example America will accept tire imports if the raw materials are environmentally friendly, the government must respond to this policy,” Rizal said.

Timotius Apriyanto, the general secretary of the BPD Indonesia Textile Association (API) DIY, stated that the supply chain will be impacted by the pressure and contraction in demand and supply brought on by global geopolitical events.

“Now, the Red Sea crisis, the ongoing Russia-Ukraine crisis, and the Gaza crisis are having an impact,” he said. “This global geopolitical pressure has had the impact of contracting the supply and demand for textile products.”

For instance, economic growth is negative, the economy of England is likewise in a dire state, and this is also the case throughout Europe. Inflation is also high in Germany. “Automatically then they prioritize buying essential goods, so they don’t shop for fashion,” he said.

During a meeting with the Association of Bonded Zone industries (APKB), he clarified that growth of 10 to 15 percent was anticipated for textile industries and textile products intended for export. Month over month, the company’s demand increased by fifteen percent.

However, if the geopolitical environment is negative on a worldwide scale, this request might not necessarily be fulfilled.

In addition to war, the 75 nations that are having national elections this year are another source of instability on a worldwide scale.

“National elections are being held in about 75 nations this year. The United States, the United Kingdom, and Russia will hold their elections in November, while the European Union and Germany will hold theirs in March. This affects over 4 billion people, or 50% of the world’s population. “This situation is certainly unfavorable, because of global uncertainty,” he said.

Right now, the priority is to react as fast as possible to the EU policy that will introduce new renewable energy (EBT) in 2030.

He went on, “This needs to be addressed as soon as possible; we need to be ready with these regulations if we want to export to the European Union. All textile products and products must use non-fossil and non-coal electricity.”

The growth of imported goods is the textile industry’s major challenge, aside from geopolitics.

He thus expects that the government would offer protection to stop the textile industry from becoming uncompetitive due to an excess of products coming from China and other nations that are not needed domestically.

In a related development, Herum Fajarwati, the head of the DIY Central Statistics Agency (BPS), reported a decline in industrial goods exports to other countries, including knitted items, leather goods, and apparel.

Nonetheless, exports to destinations like Bali and other places beyond the DIY province are rather significant.

“In reality, domestic demand is growing positively,” he added. “Exports abroad fell due to global economic conditions such as war and others, which caused demand from abroad to fall.”

(Red B-Teks/Ly)

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