Jakarta Globe, Harso Kurniawan, Jun 15, 2014
Jakarta.
Football fever will outshine electoral excitement as a fillip to apparel sales,
the Indonesia Textile Association chairman predicted over the weekend.
Ade
Sudrajad said the association estimated supporter outfits for the 2014 World
Cup would add 15 percent to Indonesia’s clothing exports, bringing to $3.5
billion sales over the first six months of this year.
Those $525
million worth of jerseys and jackets would boost overall textile product
exports to $13.5 billion, he said.
Sales have
also been driven by the demand for T-shirts and other campaign clothing for
legislative and presidential elections, Ade said. However since that demand is
confined to the local market, Ade said domestic sales were estimated to rise by
a little less, to $7.5 billion this year from $7 billion last year.
“The
effects of the elections [for sales] was stronger during the 2009 election, but
[this year] was not bad. At least, it helped boost demand,” he said.
Last year
Indonesia exported textile products worth $12.6 billion. Of that figure 58
percent was contributed by garments, 19 percent by threads, 14 percent by
fabrics, and the remaining from other fiber products.
“Export of
textile products to May was quite good. There was a rise of around $500 million
to $4.8 billion [compared to the period from January-May last year]. One of the
boosters is indeed the World Cup,” said Ade.
He said
orders for jerseys were flooding in to big textile companies in Indonesia and
companies had boosted production to match the demand.
Ade said
the main export markets for jerseys made in Indonesia were Europe and Latin
America, “because football is very popular in those two regions.”
He said Indonesia
was able to benefit from the world’s biggest football tournament as the country
is one of the production centers for giant apparel brands such as Nike and
Adidas, which produce jerseys for World Cup teams and their supporters.
“Those two
brands have ordered jackets and jerseys for men, women and children. This will
advantage the local textile companies that have business contracts with them,”
he said.
However,
Ade said, government policies prevented Indonesia’s textile sector from reaping
a bigger World Cup bonanza. Indonesia should have had the capacity to boost
textile exports by $1 billion in the first half of this year, beating global
competitors such as Vietnam, where production costs are considered lower than
in Indonesia.
“There are
many constraints for textile companies to boost production, of which most are
created by the government. For example, the higher electricity rates announced
recently. It will erode the competitiveness of our textile industry,” he said.
With the
downstream part of the sector receiving higher demand, the upstream part of the
industry was also stimulated, Ade said. There has been a sharp increase in
demand for synthetic polyesters to support apparel production. Polyester is
used to make threads, for which demand has also increased.
Ade
estimated this year’s synthetic polyester production would rise 19.7 percent to
700,000 tons. Last year Indonesia produced 585,000 tons of the polymer.
Overwhelming
demand for textile products, according to Ade, forced spinning and weaving
companies to import a proportion of fabric and thread to meet a shortfall in
domestic production.
Anne
Patricia Sutanto, president director at listed textile company Pan Brothers,
confirmed the higher demand, saying heavier orders had been experienced since
last year.
Pan
Brothers, which produces various textile products including cut and sewn knit
garments, polo shirts, woven garments and lightweight jackets and pants, booked
an 18.5 percent rise in sales to $339 million last year.
Pan’s net
income rose more than 50 percent to $10.4 million in 2013.
Anne said
last year’s production volume reached 42 million pieces. “From those figures,
there were special allocations for the World Cup,” she said.
She said
the company had exported World Cup jackets to the United States, Europe and
Asia.
Pan
Brothers is the biggest listed garment company on the Indonesia Stock Exchange
by market capitalization. It regularly receives orders from global apparel
makers like Adidas, Nike, Spyder, Lacoste, Nautica and Calvin Klein Jeans. Anne
said the textile sector was well placed to boost Indonesia’s economy. Textile
products, she said, currently contribute around 10.7 percent to Indonesia’s
non-oil-and-gas exports.
The
Indonesia Textile Association once released an estimate that Indonesia could
boost its market share in the world’s textile market to 5 percent by 2030.
Indonesia’s share is now estimated at around 1.8 percent. By that reckoning,
textile exports from Indonesia would reach a value of around $75 billion by
2030.
Ade
previously said that Indonesia should be more active in participating in global
trade deals such as the Trans Pacific Partnership. He said any deals that
include Indonesia would help boost exports to the United States.
The
Indonesian government has been reluctant to participate in the TPP for fears
the pact would not benefit Indonesia as long as domestic industry
competitiveness remains weak.
No comments:
Post a Comment