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View all search resultsTextile industry urges govt to refocus support
The government aims to revive the textile industry by facilitating financing from local banks for machinery upgrades, while considering tax incentives and establishing a special zone to integrate upstream and downstream production.
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Yarns are dried prior to being woven in a textile factory in this undated file photograph. (JP/Ganug Nugroho Adi)
T
he government’s push to revive the textile industry through multiple incentives could have a limited impact unless it targets the sector’s underlying weaknesses, particularly outdated machinery and underinvestment in upstream production, industry players and analysts have warned.
They also cautioned that the plan to establish a new state-owned textile company should avoid competing directly with existing players, which are already struggling to survive amid a flood of cheap imported clothing.
Rosan Roeslani, CEO of state asset fund Danantara, said the government aims to revive the textile industry by facilitating financing from local banks for machinery upgrades, while considering tax incentives and establishing a special zone to integrate upstream and downstream production.
“We are also considering giving tax holidays again for textile [companies]. That is one of the measures,” he said at the Presidential Palace complex on Sept. 22.
Regarding a plan to establish a state-owned textile company, Rosan said the government would not necessarily focus on building new facilities but would assess existing textile companies that could be developed through machinery and technology upgrades.
“As long as it creates a significant number of jobs and, since we are Danantara, we continue to prioritize investments that generate good returns,” Rosan said.
Coordinating Economy Minister Airlangga Hartarto said the government was also reviewing technical import rules to ease access to raw materials while addressing imports of used clothing that compete with domestic producers. It is also reviewing value-added tax (VAT) arrangements for export-oriented textile and garment companies, as well as contract employment rules to accommodate seasonal orders.
