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Indonesia funds textile machinery upgrade

Indonesia will revitalize old machinery in the textile, leather working and footwear industries in an effort to develop these fields and stimulate more investments. The program has rejuvenated 1.88 million machines since its commencement in 2007, with another 3.66 million machines more than 20 years old awaiting upgrade.

There are six categories of machines eligible for rejuvenation, including textile looms, knitting machines and those used in footwear manufacturing and the mass production of garments. The industry has a growth target of 300 per cent by 2019.

Robust economic growth and rising purchasing power make Indonesia – the world’s fourth most populated country – an attractive market for textiles and clothing. Both local and foreign companies are vying for market share. Rising costs are giving domestic producers a hard time as they try to fend off overseas competition, but technological modernization, improving labor skills, better infrastructure and the relatively low rupiah alter the picture in their favor.

Many of Indonesia’s largest listed textile and garment manufacturers have been active in raising funds through the capital markets for investment into new plants. Even though most of Indonesia’s several thousand textile businesses sell their goods in the home market, the lion's share of Indonesian-made clothes is shipped abroad, with many of the larger companies producing apparel for global brands.