Good News For Garment Entrepreneurs! Government Continues Machine Restructuring Incentives This Year

JAKARTA - The government through the Minister of Industry (Menperin) Agus Gumiwang Kartasasmita emphasized that the incentive policy for restructuring machinery and equipment for the textile and textile product (PTP) industry will be rolled out again this year.

According to the Minister of Industry, this step is expected to encourage business actors to upgrade technology so as to increase efficiency and productivity.

“The implementation of this policy is based on the Regulation of the Minister of Industry No. 18 of 2021 regarding the Machine and/or Equipment Restructuring Program in the fabric refinement industry and the fabric printing industry", he said in a press statement, quoted on Thursday, September 2.

For information, this investment incentive will stimulate the industry to use more modern and environmentally friendly machines and/or equipment. This is expected to increase the productivity and competitiveness of the textile industry which is one of the priority sectors for implementing Industry 4.0 in the Making Indonesia 4.0 roadmap.

This program is a continuation of the machine/equipment restructuring program carried out in the textile, footwear, and leather industry which was carried out in 2007-2015.

The program implementation in the previous period had a positive impact on industrial performance, including the addition of machinery/equipment investment of IDR 13.82 trillion, an increase in production capacity in the textile industry by 21.75 percent.

Then, an increase in production realization by 21.22 percent, energy efficiency by 11.86 percent, an increase in sales volume both domestically and export by 6.65 percent, and an increase in the number of workers by 28,295 people.

Meanwhile, the machine/equipment restructuring program for the 2021 period focuses on the fabric improvement industry and the fabric printing industry as an effort to repair the weakest parts in the structure of the textile and textile product industry while strengthening capacity and productivity to achieve the 35 percent import substitution target in 2022.

"This is considering that the largest portion of imports from the textile sector is in imports of finished fabric products of 48.4 percent of the total imports of textiles in 2020 of USD 7.2 billion", he said.

In its implementation, the program is carried out by providing replacement/reimbursing a discount of 10 percent of the total investment in machinery/equipment originating from imports, or 25 percent for domestic production.