Jayanty Nada Shofa, Jakarta – Indonesian textile manufacturers are still struggling against floods of imported goods, according to the Industry Ministry.

The ministry recently launched its monthly industrial confidence index that measures the manufacturing sectors' confidence in the economy. This index is based on companies' responses to a survey that asked how many new orders they had received in September versus the previous month, among other things.

An index of beyond 50 means that Indonesia's manufacturing sector remains expansive. A reading that is below the 50 mark means the industry is facing a contraction. Indonesia managed to secure a 52.48 on the September reading, marking a slight increase from the 52.40 posted the previous month.

Febri Hendri Antoni Arief, the spokesperson at the Industry Ministry, told reporters Monday that the textile sector had not fully bounced back from the rush of imported goods that enter the country be it through legal or illegal means. Although the textile sector's confidence index exceeded 50 points, it had been facing a contraction since May.

"Even so, the overall textile industry has yet to recover since the flood of imported goods. These massive imports are starting to take a toll on the apparel sub-sector.... Apparel makers book an expansive [confidence index], but [their index scores] have been on a downward trend," Febri said at a news conference.

Febri warned that the soaring imports would deal a more fatal blow on apparel businesses outside the so-called "bonded zones".

Bonded zones refer to regions dedicated to stockpiling goods that will get exported to other countries. This includes imported products that will get re-exported. In other words, businesses outside these zones mainly focus on meeting the domestic demand.

Febri said that the industry had been getting fewer export orders. This might prompt manufacturers in bonded zones to consider placing originally export-bound goods in domestic markets. This makes them an extra rival for the companies outside the bonded zones.

"Because not only do they have to cope with the imports, businesses have to compete with [the originally export-bound] goods from the bonded zones," Febri said.

The Indonesian textile industry has been under media spotlight for its mass layoffs.

According to the Manpower Ministry, 42,863 people got laid off in Indonesia so far this year as of end-July. As many as 22,356 of them used to work in the processing industry, which included textile, garment, and footwear. Think-tank Celios not long ago blamed the waves of job cuts on Chinese textile imports which were cheaper than their local counterparts.

Source: https://jakartaglobe.id/business/flood-of-imports-still-haunt-indonesias-layoffhit-textile-industry