Indonesia Textile Manufacturing Industry - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Indonesia Textile Manufacturing Industry - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Indonesian textiles Industry is expected to record a CAGR of greater than 5% during the forecast period.

The textile manufacturing sector in Indonesia is a highly unorganized sector, and COVID-19 has adversely affected the industry (which has led to an estimated 65% of textile workers being sent home temporarily ). Plummeting sales, closed factories, and lower wages are some of the problems, according to Indonesia's Industry Ministry.

An increase in exportation to major countries like United States, the European Nations, and the Middle East has led to the rapid development of the Textile Manufacturing Industry. High dependency on imported raw materials is likely to act as a restraint for the market. To expand the Indonesian Textile Manufacturing Industry, the Indonesian government has encouraged Textile Product Industry ( TPT ) to explore the fashion industry and meet its demand, which will open many new opportunities for this industry during the forecast period.

On April 13, 2021, the Indonesia Industry Ministry introduced the textile industry with new advanced technologies and the renewal of machinery. Numerous facilities for structurization are given to the textile industry, which will boost their efficiency and competitiveness. The ministry has already conducted technical training and training for transformation managers in developing the Indonesia Smart Textile Industry Hub (ISTIH). Under this industrial revolution, the exports in 2020 reached USD 33.99 billion. Investments of USD 61.97 trillion were also realized during the period.

As COVID-19 had hit the business very adversely, the industry was getting declined. However, the sector's performance is now bouncing back and is expected to continue the trend during the forecast period. Textile exports between January and October in 2021 also increased by 19%, and investment in the textile industry also rose by 12% to USD 5.06 trillion.

Indonesia's textile industry is one of the top ten contributors to nation's manufacturing sector, accounting for 6.7 % of total production. Indonesia is 12th among the leading textiles and apparel exporters in the Association of Southeast Asian Nations (ASEAN) region.

Indonesian textile products are shipped in huge amounts to the Middle East and Africa, which has created a notable positive impact on the textile manufacturing market in Indonesia. The country is trying to expand its trade with the Muslim world to tap new export markets and boost trade. The Muslim world has started giving preference to Indonesia for textiles against China.

The country's stable economy, efforts in expansion, and efforts to meet new-fashion demands are some of the factors that have attracted more investment in this industry. Australia and Indonesia have signed the Indonesia-Australia Comprehensive Economic Partnership Agreement. It is reported that the textile industry of Indonesia is expected to benefit the most from the agreement. An increase in exportation to major countries like United States, the European Nations, and the Middle East has led to the rapid development of the textile manufacturing industry.

Most significantly, from 2021, the textile industry in Indonesia has undergone a massive expansion. Indonesia has made significant economic strides in the recent year 2021 as a result of its fast-expanding industrial sector. The country now is poised to outpace Thailand and Malaysia as a major regional manufacturing and export hub, and investors are increasingly choosing Indonesia over China, Thailand, and Malaysia, drawn in by the country’s relative stability, sizeable low-cost labor pool, and large domestic market.

Indonesia's home textile market is anticipated to grow at an increased rate due to the growing fashion sensitivity of urban consumers. Rapid urbanization and industrialization have resulted in improvements in the standard of living along with an increase in the disposable income of the population. These are some factors projected to support the revenue growth of the Indonesian textile manufacturing industry.

The country's population is expected to climb much higher. Indonesian Ministry reports also state that the birth rate in Indonesia is much higher than the death rate (except during the COVID-19 period). This is the major reason for population growth in Indonesia.

With the increase in population and the accompanying changes in consumer trends, the demand for different variety of textiles is expected to surge. With the increasing availability of wide varieties of clothing in every sector and for every purpose with different fabrics availability, the market is gaining strong attraction among consumers. Consumers want to explore the market for different varieties and cost availability options.

The Indonesian textile manufacturing industry is highly fragmented in nature, with the dominance of a large number of local and international players in the market. The key players in the market occupy less than 40 % of the total market share. The key players in the Indonesian Textile Manufacturing Industry market are PT. Asia Pacific Fibers Tbk, Indorama Corporation (PT. Indo-Rama Synthetics TBK), PT. Sri Rejeki Isman TBK, PT. Tifico Fiber Indonesia TBK, PT. Pan Brothers TBK and other companies.

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