Indonesian Textile Industry on the Brink of Collapse, Association Warns
Jakarta, Indonesia – The Indonesian fiber and filament yarn industry is facing a critical crisis, with many companies prioritizing mere survival over profit, according to Farhan Aqil, General of the Association of Indonesian Fiber and Filament Yarn (APSYFI). Aqil stated Monday that the situation has deteriorated to the point where business owners feel more like “survivors” than entrepreneurs.
The industry is experiencing widespread factory closures, contract cancellations, and abandoned investment plans, resulting in significant job losses for thousands of workers.Aqil expressed frustration that the government appears unaware of the severity of the situation unfolding on the ground.
A key factor contributing to the downturn, according to APSYFI, is the government’s rejection of a safeguard measure known as BMAD (safeguard duties). This decision has led to the cancellation of planned direct investments, as foreign investors now perceive the business climate as unstable and lacking fair competition due to the influx of imported goods.
“foreign investors had come to the factory location and committed, but now see no guarantee of a fair business climate if imported goods continue to enter without obstacles,” Aqil explained. He had hoped BMAD would provide a much-needed boost to the struggling sector, but it’s rejection has had the opposite effect, even prompting multinational textile company CEOs to withdraw previously expressed interest.Data from APSYFI reveals a dramatic surge in filament yarn imports – ranging from 70% to 300% since 2017 – signaling a steady decline in domestic production. This has resulted in mounting bad debts for industry players, idle machinery, and a loss of confidence among younger generations considering careers in manufacturing.
“Young people no longer want to work in the factory, because they see for themselves how the future of this industry is like a dead end,” Aqil stated.
APSYFI fears the current conditions represent an early warning sign of deindustrialization within the textile sector and urges the government to base its policies on thorough research, rather than catering to narrow interests.
(hal/rrd)
