There Are Massive Layoffs In The Textile Industry, Experts Call The Cause Of This

Illustration (Photo: Doc. ANTARA)

JAKARTA - A number of textile companies in Indonesia fell and were forced to close their businesses.

They also took various efficiency measures due to a significant decline in production.

Based on data from the Confederation of Nusantara Trade Unions, at least six textile factories have gone out of business and caused more than 11,000 workers to experience layoffs or layoffs.

The six textile factories are PT S Dupantex, PT Alenatex, PT Kusumahadi Santosa, PT Kusumaputra Santosa, PT Pamor Spinnning Mills and PT Sai Apparel.

Meanwhile, the West Java Province Textile Product Entrepreneurs Association noted that 22 factories have been closed in the area.

International Business and Trade Law Expert Ariawan Gunadi said the government must immediately take several strategic steps to save the textile industry in the country.

"The government needs to optimize the policy of trading remedies instruments against dumping practices carried out by China, this is very important. It can be started by implementing a safeguard policy in the form of cloth Safeguard Measure Import Duty (BMTP)," Ariawan said in a written statement, Thursday, June 27.

Ariawan assessed that the policy aims to protect the domestic industry from the surge in Chinese cloth imports which resulted in significant losses.

The implementation of this policy can be realized through the issuance of a Minister of Finance Regulation (PMK) which is the basis for its implementation.

He added that the government also needs to implement the Anti-Dumping Import Duty (BMAD) policy.

This policy is designed to balance the impact of the unfair low price of imported goods sold under market value or production costs.

According to him, another way to save the textile industry is to implement a countervaliding duties policy.

This policy aims to balance the subsidies provided by foreign governments to their exporters.

"These strategic steps, if implemented effectively, can help protect domestic industries from harmful trade practices and increase Indonesia's economic competitiveness in the global market," said the Professor of Tarukamanagara University.

In addition, said Ariawan, the government also needs to optimize the customs inspection system by implementing artificial intelligence (AI)-based scanner technology.

This step is expected to increase efficiency and accuracy in the inspection of goods entering and leaving the country.

With the use of AI, the potential for fraud by irresponsible individuals can be minimized and attempts to smuggle illegal goods can be detected early.

Furthermore, Ariawan revealed, there are a number of factors that pose a threat to the national textile industry, including the oversupply that causes the export wave to exceed demand, especially in China and the growing geopolitical tensions that have triggered fragmentation of international relations.

Then, the rupiah exchange rate experienced a significant decline in the US dollar. Garuda's currency exchange rate almost reached its record high in history, which was in the range of 16,800 per US dollar and increased illegal imports with wholesale/cubication models and imported mafias that caused container buildup at ports.

The real impact felt by the textile industry is instability in the industry.

Thus, many companies are forced to reduce the number of their employees to reduce operational costs.

Given that the textile industry has contributed greatly to national exports, the turmoil in the sector can reduce export volume which ultimately affects the country's foreign exchange.

"Unstability in the textile sector can affect supply chains from various other industries that depend on textile products. As a result, the entire interconnected industrial ecosystem is disrupted, creating a prolonged domino effect that can harm various wider economic sectors," he concluded.