During the first semester of this year, investments in the procurement of new machines reached Rp3 trillion or triple the total of last year. Ade said that 300,000 new workers would be needed to meet growing demand in the industry.
Most investments were made by local businessmen. However, Thailand, Korea and China are also eyeing Indonesia’s textile market. China, for example, is looking at making Indonesia a base for its textile production to meet growing demand at home.
The textile industry currently absorbs the most number of workers, 1.3 million people, followed by the plastic and footwear industries with 700,000 and 500,000 people.
Demand for manpower in the textile industry is expected to hit 1.7 million by the end of this year. To deal with a potential shortfall in labor, some provinces are organizing training sessions to recruit workers.
Rising global cotton prices are likely to hurt the Indonesian textile industry which imports most if its cotton. “This year, the volume of cotton imports is not too different from last year, although the value has risen as prices increase,?said Ade.
The Indonesian Synthetic Fiber Producers Association secretary-general, Redma Gitawirawasta, added that increasing cotton prices on the international market would not necessarily increase the price of derivative products. For example, she said, if global cotton prices rise by 30 percent, the price of derivative products may only increase by 15 percent.
This year, cotton prices rose to more than US$2 per pound. Although cotton prices have lowered since, this year’s cotton price is estimated to be over the normal $1.2 per pound. If the price continues to increase, national textile consumption could decrease from the average 4.5 kilogram per capita to 3.9 kilogram per capita.
