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OVERVIEW THE INDONESIA TEXTILE INDUSTRY
RAMON BANGUN
Director of Textile and Multifarious Industry
Directorate General for Manufacturing Industry Base
Ministry of Industry
October, 2014
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Non Oil Industries growth in the second quarter was 6.58% higher
than the national economic growth of 5,95% and the performance of
the textile industry at 5.93%.
The average of industrial growth for the past five years is 5%, while
that of export growth 8%/year. Indonesia has only 1.8 % of world
market share and domestic market share is still below 60%
Textile industry are the strategic industry to be developed because it
has a significant role in contributing foreign exchange, provides lot
of work opportunities and also supplies the basic needs of people.
The industry has 10.6% share of total manufacturing industry work
force. Export surplus more than U.S. $ 5 billion per year.
The industry has a deep structure from up stream to downstream
consist of 4 type of manufactures that are, man made fiber, yarn,
fabrics and garment.
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Type of Industry unit quantity Machine age > 20 years
quantity %
Spinning * Spindle 7.803.241 5.025.287 64,4
Weaving * Unit 248.957 204.393 82,1
Knitting * Unit 41.312 34.743 84,1
Finishing * Unit 349 325 93,2
Garment * Unit 290.838 226.854 78,0
1. Number of Machine in Textile Industry
Source: * The Industrial Strategy Proposal, Jetro Jakarta 2005
TEXTILE INDUSTRY RESTRUCTURING PROGRAM
BACKGROUND
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TEXTILE INDUSTRY RESTRUCTURING PROGRAM
One of the major problems of the textile industry is the life of the engine that are outdated (over 20 years) this leads to high energy consumption, engine speed and low product quality and also another issue that must be faced by the industry is the emergence of newly industrialized countries that already adopting new technologies
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• Ministry of Industry on 2007th launched Textile Industry Restructuring Programme. To support textile industry for old machinery replacement to enhance competitiveness with government incentive.
2. Objectives
COUNTRY OF ORIGIN OF TEXTILE MACHINERY based on restructuring programme
2007 2008 2009 2010 2011 2012
No. Country % No. Country % No. Country % No Country % No. Country % No. Country %
1 Japan 38.71 1 Jepang 53.00 1 China 22.60 1 CHINA 25,7 1 SOUTH KOREA 87,46 1 SOUTH KOREA 81,82
2 China 15.69 2 Germany 16.00 2 Japan 21.39 2 SOUTH KOREA 17,8 2 CHINA 8,10 2 INDIA 7,82
3 Germany 10.39 3 Singapura 10.00 3 South Korea 18.67 3 JAPAN 16,4 3 INDIA 3,34 3 CHINA 6,85
4 Taiwan 7.32 4 Taiwan 7.00 4 Taiwan 10.05 4 TAIWAN 9,1 4 SWITZERLAND 0,51 4 TAIWAN 2,29
5 Hongkong 6.57 5 Italy 6.00 5 Indonesia 6.07 5 INDONESIA 8,22 5 INDONESIA 0,47 5 SWITZERLAND 0,66
6 Switzerland 4.24 6 China 4.00 6 Germany 4.90 6 GERMANY 5,78 6 FRANCE 0,05 6 USA 0,25
7 India 3.18 7 South Korea 3.00 7 Hongkong 4.19 7 INDIA 4,7 7 JAPAN 0,04 7 JAPAN 0,13
8 South Korea 3.18 8 Amerika 1.00 8 India 2.72 8 SWITZERLAND 3,22 8 TAIWAN 0,01 8 INDONESIA 0,08
9 Italy 2.23 100.00 9 Switzerland 1.67 9 ITALY 2 9 HONGKONG 0,01 9 ITALY 0,05
10 USA 2.23 10 USA 1.47 10 HONGKONG 1,65 10 GERMANY 0,01 10 GERMANY 0,02
11 France 1.27 11 Italy 1.21 11 USA 1,17 100 11 SINGAPORE 0,01
12 Belgium 1.17 12 Denmark 1.00 12 FRANCE 0,74 100
13 Indonesia 1.17 13 France 0.71 13 BELGIUM 0,61
14 Singapore 0.85 14 Singapore 0.54 14 SINGAPORE 0,57
15 England 0.42 15 England 0.46 15 VIETNAM 0,57
16 Austria 0.32 16 Spain 0.42 16 ENGLAND 0,35
17 Czech 0.32 17 Austria 0.38 17 MALAYSIA 0,3
18 Spain 0.32 18 Turkey 0.33 18 AUSTRIA 0,26
19 Sweden 0.21 19 Vietnam 0.29 19 SPANYOL 0,22
20 Greece 0.11 20 Malaysia 0.25 20 FINLAND 0,13
21 Malaysia 0.11 21 Thailand 0.21 21 SOUTH AFRICA 0,13
100 22 Belgium 0.17 22 CZECH REPUBLIC 0,09
23 Sweden 0.13 23 NETHERLANDS 0,09
24 Australia 0.04 24 TURKEY 0,09
25 Canada 0.04 25 DENMARK 0,04
26 Czech 0.04 26 SWEDEN 0,04
27 South Africa 0.04 27 THAILAND 0,04
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Number Analysis Textile Industry
2007 - 2013
1 Labor Increase 118.341
2 Production Capacity
Growth (%) 14 - 20
3 Productivity Growth
(%) 4 - 10
4 Efficiency In Energy (%)
2 - 7
EVALUATION OF TEXTILE INDUSTRY RESTRUCTURING PROGRAM
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NUMBER OF MACHINES IN TEXTILE AND TEXTILE PRODUCTS INDUSTRY
Source : Restructuring Program Ministy of Industry
Machinery Status Before and After Restructuring Program
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Type of Industry Unit Machines Age 20
yrs *
New Machinery by Restructuring
Program in 2007-2013
Spinning MP
5,025,287
1,848,212
Weaving ATM 204,393 7,249
Knitting MR 34,743 2,441
Finishing Unit 325 448
Garment MSJ 226,854 67,386
INVESTMENT PROGRESS
Source of machines : mostly imported
Type of Machines Investment Value (USD) %
Spinning 190,000,000 61.02%
Weaving 39,340,000 12.63%
Dyeing 24,715,100 7.94%
Knitting 22,800,630 7.32%
Others (boiler, air compression, etc)
34,548,130 11.09%
Total 321,403,860 100.00%
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INDUSTRY
INVESTMENT NEEDS FOR REPLACING THE OLD MACHINE,
BASED ON MACHINE AGE CATEGORIES (in Million USD) TOTAL
11-19 Years >20 Years
FIBER/FILAMENT 393,26 11,24 404,50
SPINNING 131,97 412,80 544,77
WEAVING 303,92 218,25 522,18
KNITTING 89,14 32,69 121,83
FINISHING 111,19 60,50 171,70
GARMENT 5,02 4,17 9,18
TOTAL 1.034,51 739,65 1.774,16
ESTIMATED OF THE INVESTMENT NEEDS FOR REPLACING THE
OLD MACHINE
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Providing skilled workforce through training program. Since 2011
the Ministry of Industry has facilitated training for more than
16,500 people to provide skilled workforce for garments and
footwear industry. The Ministry of Industry will continue to increase
the competence and upgrading human resources for textile,
garments and footwear industry;
Developing standards of textile products (SNI) for the purpose
good quality, security and safety of Textile and Textile Product and
the developing of workforce competency standard textile industry
(SKKNI)
Facilitation program exhibition in domestic and foreign for market
access, promotion national textile products;
Prospect of Indonesia Textile Industry
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• Competitiveness
of Indonesian textile industry will continue to improve with
increasing energy efficiency and increased productivity
• Indonesian textile industry have market opportunities in
local market (with 220 million people) and exports that
have been targeted to reach US$13.3 billion in 2012.
• Clothes for Moslems, High fashion ladies garments and
those with ethnic designs could help boost the country's
textile industry
• Technical Textile and Non Woven are another sector textile
will be priority developed in the future