INDONESIAN TEXTILE ASSOCIATION ASOSIASI PERTEKSTILAN INDONESIA Adhigraha Bldg. 16 th fl. Jl. Jend....
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Transcript of INDONESIAN TEXTILE ASSOCIATION ASOSIASI PERTEKSTILAN INDONESIA Adhigraha Bldg. 16 th fl. Jl. Jend....
INDONESIAN TEXTILE ASSOCIATION
ASOSIASI PERTEKSTILAN INDONESIA
Adhigraha Bldg. 16 th fl.Jl. Jend. Gatot Subroto, Kav. 56Jakarta 12950 – IndonesiaTel. 62-21 5272171, Fax. 62-21 5272166E-mail : [email protected], [email protected]@bpnapi.orgWebsite: www.indonesiatextile.com
Performance of Textile
Industry 2007 and
Forecast in 2008
2
NASIONAL MACROECONOMICBUSINESS CONDITION 2007
Economic Indicators 2004 2005 2006 2007 (est)
Economic Growth (%)* 5.13 5.60 5.50 6.00
Inflation (%)* 6.40 17.11 6.60 6.38
Currency (Rp/US$)* 9.360 9.830 9.020 9.130
BI Rate (%)* 7.40 12.75 9.75 8.00
Investment (Rp. triliun)* 58.30 118.28 59.29 167.92
Goods Trade Balance (USD billion)*** 25.06 27.96 39.73 39.92
Non-oil Trade Balance (USD billion)*** 21.15 26.19 37.49 39.51
Number of Unemployment (million people)**** 9.80 10.70 11.70 12.70
Number of Poverty (million people)**** 36.20 35.10 39.05 45.70
• The economic growth is still reduced by inflation and society purchasing power has yet to grow.
• No spreading out of economic growth (still focusing on the non-intensive labor sectors); thus it has yet to reduce unemployment and poverty.
• Performance of the real sectors (trade balance) are still hampered, and it has yet to be able to give good impact on the economic growth.
Source : BI*, BKPM**, BPS***, Lipi**** procecced
3
Domestic and World Textile ConsumptionBUSINESS CONDITION 2007
Total People Consumption * US$ 268,17 billion
Finished Clothes Cons. (2,5%)** US$ 6,71 billion
Volume conversion (US$ 5,5/kg)** 1.220.000 ton
Indonesia Textile Consumption
1013
1220
836882820
0
200
400
600
800
1000
1200
1400
2003 2004 2005 2006 2007
Domestic Finished Clothes Consumption 2007 (Est.)
Source: BI*, BPS** processed
• By value, finished clothes consumption declined but by volume the domestic consumption increased. Consumption per capita reached 5.3 kg (in 2006: 4,6kg/capita)
World Textile Consumption (million ton)
4748.2
49.4
54.4
56
42
44
46
48
50
52
54
56
58
2003 2004 2005 2006 2007
Source : WTO, Otexa, Eurotex processed
• World consumption increased by 3%.
• World consumption per capita in 2007 about 8,48 kg (in 2006: 8,37kg/capita)
4
National Textile Production &Model of Distribution 2007 (000 ton)
PERFORMANCE OF TEXTILE INDUSTRY 2007
Indonesia Textile Export (by region), 2007
(US$ 10,06 billion)
US43%
EU16%
Row36%
Japan5%
Production : 800 Export: 220(27,5%)
Impor : 705
Fiber :
Production: 1680 Export: 800(47,6%)
Import: 90
Yarn:
Production: 970 Export: 320(32,9%)
Import: 110
Fabric:
Production: 410 Export: 380(92,6%)
Import: 20
Garment :Production : 120 Export: 110
(91,6%)Import: 68
Other Products:
Production: 230
SMEs Garment :
DOMESTIC MARKET (Total Sales: 358.000 ton worth US$ 1,97 billion)
Source: API (processed)
•Indonesia is still relying on export market by USA, EU and Japan as the main export destination country.
5
Trade Performance (Export-Import)
Indonesia Textile Trade (US$ billion)
6.8
8
7.0
3
7.6
4 8.6 9.
45
10.0
6
1.8
2
1.6
7
1.7
2
1.6
1
1.5
8
2.0
5
5.0
6
5.3
6
5.9
2 6.9
9
7.8
7
8.0
1
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2002 2003 2004 2005 2006 2007(est)Total Export Total Import Balance
Sub-Sector Export Import
Value (US$ billion) Volume (000 ton) Value (US$ billion) Volume (000 ton)
Fiber 0,3 (15% increase) 220 6% increase) 0,98 (24% increase) 705 (increase 18%)
Yarn 1,89 (6,1% increas) 800 (1% increase) 0,23 (17,8% decrease )
90 (decrease 29%)
Fabric 1,44 (2% decrease ) 320 (0,6% decrease ) 0,44 (22% increase) 110 (increase 5,7%)
Garment 5,97 (13,2% increase) 380 (1% increase) 0,15 (200% increase) 20 (increase 81%)
Other product 0,46 (15% increase) 110 (10% decrease ) 0,25 (increase 177%) 68 (decrease 21%)
TOTAL 10,06 (6,4% increase) 1.830 (2,6% decrease ) 2,05 (increase 29,7%) 993 (increase 4,6%)
Trade Performance 2007 (Compared to 2006)
• Export value increased by 6.4% (has yet to meet growth target by 10% annually).
• Export volume declined and the increase of export was driven by increase of unit price.
• Importing clothing drastically increase.
• Trade balance totaled US$ 8.01 billion (increased by 1.8% compared to 2006).
• The world trade value of 2007 reached to USD 546 billion, and Indonesia only dominated 1.8% of the total market share.
Source: BPS (est) processed
Source: BPS
PERFORMANCE OF TEXTILE INDUSTRY 2007
6
Domestic Market Condition
Domestic Market Share 2007 (Total: 1.220.000 ton)
Ilegal import71%
Import7%
Local Supply22%
Garment Consumptionin Domestic Market (000 Ton)
557
658
303
456
270
30
44
51
88
238
195
489
506
862
25
0 200 400 600 800 1000 1200
2003
2004
2005
2006
2007
Domestic product Legal Import ????
Domestic Sales (000 Ton)
129 193
21
150
30
484
511
282
306
613
658
303
456
230 2
60
0
100
200
300
400
500
600
700
2003 2004 2005 2006 2007
Med-Large Industry Home Industry Total Sales
Source : BPS, Ministry of Industry, BI, API Compiled
• Domestic market consumption increased by 20% to 1.22 million ton.
• The local products sales in domestic market declined by 42.9% to 260.000 ton and 22% share (far from the target of 75%).
• Import volume of clothing and other products increased by 72%.
• Import products dominated domestic market by 70% share to 862.000 ton.
PERFORMANCE OF TEXTILE INDUSTRY 2007
7
Position in Int’l Market
27
.77
4.7
8
4.3
7
3.7
9
3.6
0
2.7
5
2.6
9
2.1
0
2.0
6
1.8
9
Chi
na
Mex
ico
Indi
a
Vie
tnam
Indo
nesi
a
Ban
glad
esh
Pak
ista
n
Hon
dura
s
Cam
bodi
a
Can
ada
Bil
lio
n (
US
D)
Bangladesh, 3.35
Pakistan, 3.28
Honduras, 2.55
Cambodia, 2.51
Canada, 2.3
China, 33.84
Indonesia, 4.39 Vietnam,
4.62India, 5.33
Mexico, 5.82
INDONESIA POSITION IN USA MARKETJANUARY-OCTOBER 2007
% SHARE
Indonesia Textile Export to the US (US$ million)
1,9762,376 2,620
3,081
3,9304,320
2002 2003 2004 2005 2006 2007 (est)
• Export to the US grew by 10% to US$ 4.32 billion.
• Indonesia’s share in the US market was 4.39% (in 2006 was 4.21% share).
• The position declined 1 level to 5th, under Vietnam by share 4.62% (in 2006: 3.74%).
PERFORMANCE OF TEXTILE INDUSTRY 2007
8
18.4
1
8.68
4.43
3.17
1.99
1.78
1.64
1.10
1.06
0.99
Chi
na
Tur
key
Indi
a
Ban
glad
esh
Tun
isia
Mor
occo
Pak
ista
n
Indo
nesi
a
Sw
itzer
land
Hon
gKon
g
Bil
lio
n (
Eu
ro)
Bangladesh, 2.90
Tunisia, 1.80
Morocco, 1.60
Pakistan, 1.50
Indonesia, 1.00
Switzerland, 1.00
HongKong, 0.90
China, 16.90
Turkey, 8.00
India, 4.10
INDONESIA POSITION IN EU-27 MARKETJANUARY-AUGUST 2007
%SHARE
Indonesia Textile Export to EU (US$ million)
1,558 1,586
2,232
1,6981,881
1,650
2002 2003 2004 2005 2006 2007(est)
• Despite EU import increased by 1.2% but Indonesia export to the region declined by 1.2%.
• Indonesia’s share is 1% and the position is in the 8th in the EU countries.
PERFORMANCE OF TEXTILE INDUSTRY 2007 Position in Int’l Market
9
Indonesia Textile Export to Japan (US$ million)
344
426480 474 494 504
2002 2003 2004 2005 2006 2007(est)
• In 2007, Japan textile import increased by 3.3% and Indonesia export rose by 2.1% to US$ 504 million.
• Indonesia’s market share in 2007 increased to 2.9% (2006: 1.8% share).
2,44
9
91 60 58 56 45 37 37 17 12
Ch
ina
PR
Ind
on
esia
Ko
rea
Rep
Tai
wan
US
A
Ind
ia
Th
aila
nd
Vie
tnam
Pak
ista
n
Mal
aysi
a
bil
lio
n Y
en
China PR, 76.6
Taiwan, 1.8
Korea Rep, 1.9
Indonesia, 2.9
USA, 1.7India, 1.4
Vietnam, 1.2
Thailand, 1.2
Pakistan, 0.5
Malaysia, 0.4
INDONESIA POSITION IN JAPAN MARKETJANUARY-NOVEMBER 2007 *)
% SHARE
Note: *) Excl. EU-25
PERFORMANCE OF TEXTILE INDUSTRY 2007 Position in Int’l Market
10
Indonesia Textile Export to ASEAN(US$ billion)
0.54 0.58 0.600.67 0.66
0.33 0.34
0.000.100.200.300.400.500.600.700.80
2002
2003
2004
2005
2006
2006
*)
2007
*)Data : *) Jan-JunIndonesia Textile Import
from ASEAN (US$ billion)
0.10 0.09
0.17 0.18
0.22
0.05 0.06
0.00
0.05
0.10
0.15
0.20
0.25
2003
2003
2004
2005
2006
2006
*)
2007
*)
Textile Trade Balance Indonesia -ASEAN (US$ billion)
0.440.49
0.430.49
0.44
0.27 0.28
2003
2003
2004
2005
2006
2006
*)
2007
*)
.
Inter-ASEAN Textile Trade
*) Jan-Jun
Indonesia Export to ASEAN slowly increased by 3.3% and the import fast increased by 15%, mainly from Thailand and Philippines.
PERFORMANCE OF TEXTILE INDUSTRY 2007
11
Impact on National Economic
6.8
8
7.0
3
7.6
4
8.6 9
.47
10
.06
1.8
2
1.6
7
1.7
2
1.6
1
1.5
4
2.0
5
5.0
6
5.3
6
5.9
2 6.9
9
7.9
3
8.0
1
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2002 2003 2004 2005 2006 2007 (est)Total Export Total Import Balance
TEXTILE CONTRIBUTION AGAINST THE GDP VALUE 2007
Net Export : US$ 8,01 billionDom. Sales : US$ 1,97 billionInvestment : US$ 0,33 billion Total : US$ 10,31 billion
GDP 2007 : US$ 423,69 Milyar
INDONESIA TEXTILE TRADE BALANCE(US$ billion)
Pulp dan paper13.37%
Oil palm16.10%
Rubber products17.92%
Furniture7.90%
Shoes & Leather products
5.16%
Textile24.33%
Non-oil1.67% Other
6.87%
Mining products
6.68%
SHARE SURPLUS OFINDONESIA TRADE 2007
(TOTAL US$ 39.92 BILLION)
Manufacture
12%
Agriculture44%
Other18%
Retail, Restaurant
& Hotel20%
Mining1%
Construct5%
SHARE OF WORKER IN TEXTILE INDSUTRY AGAINST THE NATIONAL INDUSTRY
(97,58 MILLION)
15%Textile & Garment
(1,841,520)
• Biggest foreign exchange earner from non-oil sector (2,4% to GDP)
• Export surplus is always above US$ 5 billion annually• The biggest absorber of workers in manufacturing industry
PERFORMANCE OF TEXTILE INDUSTRY 2007
12
TEXTILE BUSINESS CLIMATE 2008/2009:CHANCE, CHALLENGE, OBSTACLE AND
WORKING AGENDA IN TEXTILE INDUSTRY
13
National & World EconomicBUSINESS CLIMATE FORECAST 2008/2009
If target of 6.8% economic growth in 2008 can reachable and inflation can be reduced by 5%, the society’s purchasing buyer would increase. At any rate, government must focus on the sector driven to increase the economic growth. If not focusing on the increase of the manufacturing sector, the economic growth would be in appearance only since it cannot reduce number of unemployment and poverty.
Along with the increase of the world crude oil price reached to about USD 100/barrel, the world economic is expected to slow down. It will impact on the growth of trade volume and value (export-import. The decline of growth in the importing countries will also make the trade dropped.
14
Textile Consumption & Supply-Demand
Indonesia Textile Consumption
(000 ton)
1,3001,2201,013
836
0
500
1000
1500
2005 2006 2007 2008
• Optimistic assumption, if government can increase society’s purchasing power, the textile consumption will grow to about 1.3 million ton in 2008.
The World Textile Consumption (million ton)
49.4
54.456 56.5
45
50
55
60
2005 2006 2007 2008
Source: WTO, Otexa, Eurotex processed
• Despite not significant, the world textile consumption is predicted to remain grow and would be 56.6 million ton in 2008 by USA and EU as the main market.
BUSINESS CLIMATE FORECAST 2008/2009
15
World & Domestic Textile Market
The World Textile Trade (US$ billion)
0
200
400
600
800
2001 2005 2006 2007 2008est
2009est
Textile Clothing
• Despite consumption grows, the illegal import will disturb market share of local products in domestic market. For that, share in the domestic market is predicted to remain under 25%.
• Growth of the world textile consumption will impact on the trade value. In 2008, the world textile trade will reach to US$ 565 billion.
• China and India are still dominating world textile trade. China will be free from the safeguard measure and to be member of WTO. Indonesia will face other potential competitor such as Vietnam and Kampuchea those get rapidly growth in the garment industry.
BUSINESS CLIMATE FORECAST 2008/2009
16
To increase competitiveness in the domestic and export, the government should focus on:
• Having trade cooperation (FTA) with the countries to be main export destination like USA and EU, like with Japan (IJ-EPA).
• Activating ITPC as marketing agent of the national industry in cooperates with related associations relating to the effort to have market penetration.
• Facilitating promotion like exhibition and other promotional activities in the countries to be main textile export destination, such as Textile World (EU), Magic Show (USA), ITAF, IFW, etc.
• Handling problem of unfair trade competition, in which import goods can be easily imported and circulated to the domestic market.
BUSINESS CLIMATE FORECAST 2008/2009 World & Domestic Textile Market
17
Investment & Machinery Modernization
• Despite banking is still focusing on the government obligation savings; however, some banks begins allocating funds to the textile industry.
• Program of Increasing Machinery Technology in the textile industry drive textile manufacturers to modernize machines and expand production capacity. In 2007, the investment increased to US$ 300 million. This investment will impact on the performance of textile industry in the future.
• In 2008, it is expected that there would be increase of investment of more than US$ 500 million. The fund is allocated to modernize machines in the sectors of spinning and weaving and increase production capacity in knitting, finishing, and weaving.
Restructuring/Modernization
- 2.5 million spindle- 200,000 shuttle loom
Expansion
- 20 Man Made Fibre unit- 2.4 spindle- 63,500 shuttle-less loom- 16,600 knitting mach.- 221 finishing unit- 179,000 sewing mach
Increase of Production Capacity (million ton)
Fiber : 1.04 1.76Yarn : 2.30 3.30Grey Fabric : 1.75 2.50Finish Fabric : 1.52 2.50Garment : 0.59 0.95
Target on Production CapacityITPT National 2010
BUSINESS CLIMATE FORECAST 2008/2009
18
Availability of Energy Supply
• The energy supply from PLN has yet to meet the industry’s demand.
• The electricity base rate (4 cent/kwh) is competitive enough, but the applied rate (due to peak season program, multiuse, public lighting and VAT) makes no longer competitive (8 cent/kwh).
Benchmark Average Applied Electricity Rate For Industry 2005 (cent/kwh)
Indonesia : 8 China : 7,6 Bangladesh : 3 Mesir : 3 Pakistan : 6,6 Vietnam : 7
Source : World Bank, ASEAN Sec, API Compiled.
Energi Supply In Textiles Industry 2010
PLN (State Own)30%
Fuel Own Power Plant5%
Gas & Coal Own
Power Plant65%
Energi Supply In Textiles Industry Before 2005
PLN (State Own)90%
Fuel Own Power Plant7%
Gas & Coal Own
Power Plant3%
Energi Supply In Textiles Industry 2006-2007
PLN (State Own)75%
Fuel Own Power Plant6%
Gas & Coal Own
Power Plant19%
Source : API Compiled
Textile industry has begun doing energy diversification by building private power plant using coal and gas as fuel source
BUSINESS CLIMATE FORECAST 2008/2009
19
Giving priority to primary energy (gas and coal) to meet the domestic energy demand.
Supporting industry to have energy diversification by making sure continuity of gas and coal supply to the industry.
Increasing efficiency for the PLN performance and building new power plant using domestic source of primary energy; thus it can meet industry’s need by competitive price.
Government should focus on:
BUSINESS CLIMATE FORECAST 2008/2009 Availability of Energy Supply
20
• The labor system cannot drive increase of workers’ productivity; thus it declines competitiveness.
• The Act No. 13/2001 especially for minimum wage, outsourcing, overtime, and severance pay, is still burdening industry (un-friendly business policy).
• The Work Training Center has yet to be maximally used to increase workers’ productivity.
Average Cost for Labor 2007 (US$/hour)
Indonesia : 0,76 China : 0,55 Vietnam : 0,35India : 0,60 Pakistan : 0,40 Bangladesh : 0,35
Labor Productivity Rank 2005Thailand : 27 Malaysia : 28 Korea : 29China : 31 Filipina : 49 Indonesia : 59
Source : Min. Of Labor compiled from any other source
Company does training to increase workers’ productivity, either done internally or makes cooperation with the training
institutions
LaborBUSINESS CLIMATE FORECAST 2008/2009
21
Revising the Act No. 13/2001 mainly in minimum wage, outsourcing, overtime, severance pay to make business more and more favorable.
Reactivating Work Training Center (BLK) as training institution to increase workers’ skill and productivity.
Supporting training and education centers to increase workers’ productivity. The centers can make cooperation with industry in arrange model of training and education.
Labor
API in cooperates with government should focus on:
BUSINESS CLIMATE FORECAST 2008/2009
22
• The THC rate is more expensive compared to the ASEAN countries.
• Access to seaports damage and traffic jam (cost and time of transportation is more and more increase).
Terminal Handling Charge Rate (US$)
Country2004 2005
20 feet 40 feet 20 feet 40 feet
Indonesia 150 240 97 150
Singapore 110 160 110 160
Philippine 78 N/a 78 N/a
Malaysia 76 N/a 76 N/a
Thailand 40 N/a 40 N/a
Source: Indonesian Shipowner Association (DEPALINDO)
Infrastructure
High-cost economy in transportation sector (from, in and to the seaports):
BUSINESS CLIMATE FORECAST 2008/2009
23
Increase productivity and efficiency of the seaport performance to make quicker services and reduce THC of 20-feet under US$ 70/container and 40-feet under US$ 100/container.
Improving access from and to the seaport to reduce traffic jam.
Drive investment in transportation sector (train) from industrial estates to the seaport. It will make transportation faster, safer and more competitive price.
Infrastructure
To handle the problems in infrastructure, API and government should focus on:
BUSINESS CLIMATE FORECAST 2008/2009
24
TARGET OF THE TEXTILE INDUSTRY 2008:By above estimation and forecast, performance of the textile industry in 2008 is targeted:
Investment aimed at modernizing and expanding production will increase 5% of production capacity; thus, the production utilization is targeted to be above 80%.
By new investment, it is expected there would be growth by 5% of number of workers.
Import growth in the US, IJ-EPA and AJ-EPA, correction of the RMB value against the USD, political condition in Pakistan, industrial growth of home textile in Asia, and accurate promotional strategy are expected to drive growth by 10% of export.
The domestic market will be difficult to reach. At any rate, if the national textile industry can seize market share of uniform, the local products are expected to dominate 60% of the domestic market.
---- T H A N K Y O U ---
25
Forecast of textile export by sub-sector in 2008 as follows:
0
2000
4000
6000
8000
10000
12000
2005 2006 2007 2008Forecast)
Forecas t of Textile Export Value in 2008
Fiber Yarn Fabric Garmen Other TOTAL
Total Export Growth : 10%Fiber export growth : 0%Yarn export growth : 10%Fabric export growth : 5%Ready-made wear : 12%Other textile export growth : 6%
Forecast of Textile Export Value of 2008Total : US$ 11,06 billionFiber Export value : US$ 0,3 billionYarn export value : US$ 2,08 billionFabric export value : US$ 1,51 billionReady-made wear export : US$ 6,68 billionOther : US$ 0,49 billion
TARGET OF THE TEXTILE INDUSTRY 2008:
26
T H A N K Y O UINDONESIAN TEXTILE ASSOCIATIONINDONESIAN TEXTILE ASSOCIATIONASOSIASI PERTEKSTILAN INDONESIAASOSIASI PERTEKSTILAN INDONESIA
Adhigraha Bldg. 16 th fl.Jl. Jend. Gatot Subroto, Kav. 56
Jakarta 12950 – IndonesiaTel. 62-21 5272171, Fax. 62-21 5272166
E-mail : [email protected], [email protected]