The textile and textile products (TPT) industry is one of the leading sectors of national manufacturing. Aside from being a foreign exchange hero for the past few decades, this sector is also a key employment provider.

According to the Chamber of Commerce and Industry (Kadin), 3.65 million people (18.79%) of the total manufacturing workforce are employed in this sector. Meanwhile, the Ministry of Industry (Kemenperin) notes that as of 2024, the number of workers in the TPT (Textile and Textile Products) industry sector has reached 3.9 million people, or almost 20% of the total workforce in the national manufacturing sector.

With such a large workforce, their productivity and skills have a significant impact on the industry's performance. Therefore, the Head of the Industrial Human Resources Development Agency (BPSDMI) at the Ministry of Industry, Masrokhan, stated that developing competent industrial human resources is a priority program. One of the ways is implemented is through vocational education and training.

Significant Performance

After struggling and facing pressures throughout 2023, the TPT (textile and textile product) industry showed a significant recovery at the beginning of 2024 with positive GDP (gross domestic product) growth. "In the first quarter of 2024, the TPT industry began to show significant performance improvements, with GDP growing by 2.64% year-on-year (yoy), and quarter-on-quarter growth of 5.92% compared to Q4-2023, which had contracted by -1.15%," said Acting Director General of the Chemical, Pharmaceutical, and Textile Industry (IKFT) at the Ministry of Industry, Taufiek Bawazier, in Padalarang, West Bandung Regency, on Tuesday (May 21, 2024).

The brilliant performance of the TPT (textile and textile product) industry is also reflected in its export value in the first quarter of 2024, which increased by 0.19%, amounting to US$2.95 billion. This is noteworthy given that the export market situation is still affected by global economic uncertainty due to various international conflicts. On the other hand, investment in the TPT sector also increased. Foreign Direct Investment (FDI) rose by 70.2%, amounting to US$194.3 billion.

The Ministry of Industry also praised several companies for tapping into new markets. One of the companies is PT Mahugi Jaya Sejahtera, which successfully entered the Dubai market and some other Middle Eastern countries. In May 2024, the company exported 300,000 meters of fabric in three containers worth US$350,000.

According to the Ministry of Industry, Indonesia's primary markets for garments are the European countries, the United States, and Japan. Thus, the success in entering non-traditional markets is noteworthy.

Non-Traditional Markets

The garment and textile market in Middle Eastern countries is predicted to grow significantly. Over the next five years, it is expected to grow by 7%, with the fashion market estimated to be worth US$89 billion. The United Arab Emirates (UAE) and Saudi Arabia account for nearly half of the fashion industry market in the Middle East, with Qatar's consumption also on the rise.

Indonesia exports textiles and garments to Middle Eastern countries, accounting for about 5.4% of the total national TPT (textile and textile products) exports, or US$753 million. This means it only has a market share of 1.5%. "Therefore, efforts to increase exports to Middle Eastern countries are crucial," he emphasized.

To boost the export performance of the national TPT (textile and textile product) industry, the Ministry of Industry has prepared strategic measures. These include implementing a program for restructuring machinery or equipment in the fabric finishing and printing industries, according to the Ministry of Industry Regulation Number 18 of 2021. In 2024, the Ministry allocated a budget of Rp50 billion for this restructuring program, targeting 59 companies.

Additionally, accelerating the implementation of Industry 4.0 by leveraging key technologies to compete globally, such as artificial intelligence, novel fabrics, Internet of Things (IoT), rapid data analysis for quick adaptation, mobile commerce, virtual and augmented reality (VR), online vector editors, 3D printing, blockchain, and sustainability.

"We are also promoting human resource competencies enhancement through vocational education that matches industry needs. Additionally, ensuring easy access to raw materials for export-oriented industries is essential," explained the Director of the Textile, Leather, and Footwear Industry at the Ministry of Industry, Adie Rochmanto Pandiangan.

Writer: Dwitri Waluyo
Editors: Ratna Nuraini/Elvira Inda Sari/Wilda Stiana
Translator: Ratna Puspa Merdika