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Indonesia Looking Good To Foreign Textile Firms

Rivet's 2020 Denim Circularity report takes a deep dive into how the global denim industry is plotting its circular future amidst a worldwide pandemic.

A near-perfect set of conditions favorable to manufacturing in Central Java has foreign textile companies eager to invest in this heavily-populated province of Indonesia.

Among the potential foreign investors are China and South Korea, said Ramon Bangun, director of Indonesia’s Textiles Industry and Miscellaneous Manufacturing Industries at the Ministry of Industry.

What makes Central Java attractive to foreign textile investment are its hospitable business and political climates and the relatively low cost of labor, according to Mr. Bangun.

Adding to the desirability of Central Java as a location for textile and garment manufacturing, according to provincial Governor Ganjar Pranowo, is the area’s convenient accessibility to improved highways, to airports and to seaports for trans-oceanic shipping.

Mr. Bangun cited other foreign investors, including Vietnam, which have established manufacturing units throughout Indonesia in remarks he made at the Garment Industry Human Resources Development Centre in Central Java’s Semarang, the provincial capital.

As more textile and garment units start up in Central Java, the large provincial labor pool is expected to be absorbed into manufacturing operations, a labor-intensive process.

The Central Javanese labor force according to government data released in February, 2013, stood at 16.91 million, with some 94.4% employed.

Unemployment in the province was 5.57%, or some 940,000 people, a source of labor which the new garment and textile plants will presumably draw upon.

Textile and garment manufacturing are Central Java’s biggest foreign export products, accounting for some $169.25 million in June of this year.

Central Java’s emergence as a relatively new source for manufacturers continues the current trend of foreign textile and garment makers to set up plants in Southeastern Asian countries.

 

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