Executive Summary

Key insights and market outlook

The Indonesian government is taking significant steps to strengthen the national textile industry through the formation of a new state-owned enterprise (BUMN) focused on textiles and comprehensive supply chain revitalization. The initiative, supported by President Prabowo Subianto, aims to enhance the sector's competitiveness and achieve US$40 billion in textile exports within 10 years ²

. Key measures include improving domestic upstream capacity to reduce reliance on imported raw materials while maintaining necessary imports to support production continuity ¹.

Full Analysis

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Deep Dive Analysis

Indonesian Government Launches Comprehensive Textile Industry Revitalization Plan

New State-Owned Enterprise to Lead Sector Development

The Indonesian government has announced plans to establish a new state-owned enterprise (BUMN) dedicated to the textile sector, marking a significant step in the revitalization of the national textile industry ²

. This move follows a high-level meeting chaired by President Prabowo Subianto, demonstrating strong political commitment to the sector's development. The new BUMN is expected to play a crucial role in implementing the government's comprehensive strategy for the textile industry.

Strategic Objectives and Targets

The government's roadmap for the textile sector includes an ambitious target of achieving US$40 billion in textile exports within the next 10 years ²

. This objective is part of a broader effort to strengthen Indonesia's position in the global textile market through enhanced production capacity and improved product quality. The plan also emphasizes the importance of revitalizing the entire textile supply chain, from upstream to downstream operations ¹.

Supply Chain Strengthening and Raw Material Strategy

Industry stakeholders, including the Indonesian Garment and Textile Association (AGTI), have welcomed the government's initiative and stressed the need for a comprehensive approach to supply chain revitalization. According to Anne Patricia Sutanto, Chair of AGTI, strengthening the domestic upstream industry is crucial to reducing dependence on imported raw materials. However, she also acknowledged that imports would remain necessary until domestic capacity can meet industry needs ¹

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Policy Support and Implementation Framework

The successful implementation of this initiative will require coordinated efforts across various government agencies and stakeholders. Minister of Economy Airlangga Hartarto has indicated that the government will provide a supportive policy environment to facilitate the growth of the textile sector. The formation of the new BUMN is seen as a key component of this strategy, providing a dedicated vehicle for implementing the government's vision for the industry ²

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References