Jakarta. President Prabowo Subianto convened several ministers from the Red and White Cabinet on Tuesday, at the Presidential Palace in Jakarta to discuss the current situation of Indonesia's textile industry, particularly focusing on textile giant Sri Rejeki Isman (Sritex).

Chief Economic Affairs Airlangga Hartarto said that the president aimed to gain insights into the textile industry's difficulties. "His directive was for the company to continue operating, and we will find a technical solution," Airlangga said after the closed-door meeting.

As an initial step, the government plans to ensure that Sritex can maintain its import-export activities.

Airlangga also noted that discussions regarding potential emergency funding for Sritex are ongoing after being declared bankrupt by the Semarang Commercial Court. "We need to assess the situation regarding emergency funding since it is now under a curator, and discussions must be held with them," he added.

The minister expressed hope that by keeping Sritex operational, jobs for the company's 50,000 workers can be preserved. "If the company continues to produce, workers can remain employed," he said.

Recently, the ministry launched its monthly industrial confidence index, which gauges manufacturing sector confidence based on companies' responses regarding new orders received in September compared to the previous month. An index reading above 50 indicates expansion, while a reading below 50 signals contraction. Indonesia's manufacturing sector secured a reading of 52.48 in September, a slight increase from 52.40 in August.

Febri Hendri Antoni Arief, spokesperson for the Industry Ministry, said that the textile sector has not yet fully recovered from the influx of imported goods. Despite the confidence index exceeding 50 points, the sector has been experiencing layoffs since May.

According to the Manpower Ministry, 42,863 individuals were laid off in Indonesia as of the end of July this year, with 22,356 of those coming from the processing industry, including textiles, garments, and footwear. 

The Indonesian Filament Yarn and Fiber Producers Association (Apsyfi) noted that around 30 textile factories have shut down, causing 10,800 layoffs from January to May 2024, up from 7,200 layoffs in 2023 in Bandung and Surakarta.

The think tank Celios recently attributed job losses to cheaper Chinese textile imports undermining local products.

The Indonesian government has extended safeguard tariffs on imports of textiles, carpets, and other fabric coverings for another three years in a bid to protect the domestic textile industry, which has struggled to return to pre-pandemic levels due to declining domestic and export demand and increasing competition.

Add as a preferred source on Google +