upn-taipei news-business-2010-10-25-13-indonesia Spinning Industry Raw Materials Recessive

indonesia Spinning Industry Raw Materials Recessive


The performance of the textile and apparel industry export value this year's first semester quite encouraging with a growth of 19.5%. But unlike previous years where the export growth driven by the growth of garment exports, this year's export growth would be encouraged by the high export value growth rate of 51.4% fiber.

Shifting trend of export performance is inviting some industry concerns, the article it indicates weakening of the upstream-downstream integration of the national textile industry. According to the Head of R&D STTT ITT Alumni Association, Rizal Anshori, industrial integration is marked by greater export growth sector downstream than upstream sector. "If growth is greater downstream, it means creating a higher value added and employment for more" he explained.

Related to the high export growth fiber, Rizal added that the government should do something to improve the integration of the national textile industry. "If until semester 1 this year export volume growth of 17.8% or fiber to 178 thousand tons, could have calculated the added value and employment occurs if the amount is processed in the downstream industry, made of yarn, fabric made until sewn" he added .

On the other hand, in recent months, the spinning industry is experiencing the pressure of raw material supply. Marketing Manager Gaindo Cotton, Hibarkah revealed that the price of cotton that was one of the main raw materials continued to crawl up the spinning industry. Currently the price of cotton in New York Features reached USC 109/lbs, beginning in 2009 while still at level 60. This condition is suspected due to the decline in world supply as the impact of floods in Pakistan and India issued a policy for cotton exports. "If cotton prices go up, surely the price of other fibers such as rayon polyester and also will go up" he said.

Hibarkah again explained that the pressure of the raw material in textile industry increased by a lack of supply of rayon. "While demand for rayon yarn and fabric of the world is experiencing an increase" he added.


Rayon supply in-Cartel

While the results of the study Indotextiles mention that indeed the demand for rayon yarn this year increased. For example, the United States market where the volume of imports in August raised 27.1 percent into 1.99 billion SME, driven by increased imports of rayon yarn amounted to 63.6%.

Executive Director Indotextiles, Redma Gita Wirawasta says that the export volume of Indonesian rayon yarn to the United States until August this year rose only 41.6%, while Pakistan, India and China experienced very high growth respectively 309.2%, 213.1% and 126.4%. Even in total, the volume of exports of rayon yarn in first semester this year has decreased from 2 thousand tons to 1.8 thousand tons, down about 10%, which means there is a very drastic decline in the export market than the United States. While on the contrary, the export volume of rayon fibers have increased by 13.3%.

Redma explained that this condition occurs because the supply of rayon fibers to the spinning industry we are very limited as a result of export policies carried out by two rayon fiber producers namely Indo Bharat Rayon (IBR) and the South Pacific Viscose (SPV). Even more than that, the policy which made the price of rayon fiber producers tends to harm our spinning industry. "Not only restrict the sale into the country, they sell into the country are also more expensive than exports market sell competing products that reduce our rayon yarn, so do not be surprised if we rayon yarn export volumes declined" he confirmed.

In response to the above conditions, it would bring this matter to the Committee for Supervision of Business Competition (Commission) as indicated to regulate prices. Moreover, these companies dominate the market more than 75% and also indicated to the cartel. "We take this issue to the Commission for the improvement happening upstream-downstream business climate in the textile industry, so that the national textile industry as a whole more competitive" he added.



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Source of data:
Export-Import Data from Bank Indonesia Indonesian textile processing
U.S. textile imports data from OTEXA
Data of New York cotton prices Cotton Feature


About the IKA ITT-STTT

Institute of Textile Technology Alumni Association - College of Textile Technology is a professional organization in the field of textiles and apparel in which the members are alumni of the institution of government-owned textile (Institute of Textile Technology and Textile Technology High School). Currently 90% of the members of this organization to work as professionals in almost all textile companies in Indonesia and other countries. (www.ikaittsttt.org)