Indonesia’s Textile Industry on Brink of Crisis as Foreign Firms Plan to Relocate
The Indonesian textile industry is facing a major crisis as over a dozen large manufacturers plan to relocate from Vietnam, sparking concerns of factory closures and widespread layoffs, industry leaders warned on Wednesday.
Industry Leaders Sound the Alarm
"If this relocation happens on a large scale, it could devastate local factories… Massive job losses across the industry are inevitable," said National Association of Importers (Ginsi) chairman Subandi as quoted by Media Indonesia.
Financial Turmoil at PT Sri Rejeki Isman
The warning comes amid financial turmoil at PT Sri Rejeki Isman (Sritex), once Indonesia’s largest textile company, which defaulted on its debts in 2021. The company, headquartered in Sukoharjo, Central Java, which previously employed tens of thousands of workers, has been forced to scale back production and shut down several facilities.
Industry Concerns
Industry groups fear that the arrival of foreign competitors could further destabilise already struggling local manufacturers.
"We don’t know how many workers these companies will bring from their home countries. If too many foreign workers are hired, fewer jobs will be available for locals, and mass layoffs will be unavoidable," Subandi added.
Government Intervention Needed
Ginsi has urged the government to step in, emphasizing the need to strengthen domestic industries rather than turning Indonesia into a relocation hub for foreign firms.
"If our factories lack the capital to modernise, the government must intervene and support them," Subandi said, warning that without intervention, Indonesia’s textile sector may face a prolonged decline.
Confirmation of Relocation Plans
National Economic Council chairman Luhut Binsar Pandjaitan confirmed last week that 10 to 15 major textile firms are set to move their operations to Indonesia, with plans to establish facilities in Central Java, West Java, and East Java.
Conclusion
The Indonesian textile industry is on the brink of a major crisis, and it is crucial that the government takes immediate action to support local manufacturers. The industry leaders have urged the government to step in and provide support to help local factories modernize and compete with foreign firms. Without intervention, the textile sector may face a prolonged decline.
FAQs
Q: What is the current state of the Indonesian textile industry?
A: The industry is facing a major crisis as over a dozen large manufacturers plan to relocate from Vietnam, sparking concerns of factory closures and widespread layoffs.
Q: What is the impact of this relocation on local workers?
A: The arrival of foreign competitors could lead to mass layoffs and fewer job opportunities for local workers.
Q: What is the solution proposed by industry leaders?
A: The government should step in and provide support to help local factories modernize and compete with foreign firms.
Q: What is the confirmation from the National Economic Council?
A: 10 to 15 major textile firms will move their operations to Indonesia, with plans to establish facilities in Central Java, West Java, and East Java.