Indonesian Textile and Apparel Industry Analysis

Indonesian Textile and Apparel Industry Analysis

Summary:
Indonesia’s textile and apparel industry is a diversified one, involved in a number of activities like transformation of raw material into fiber, yarn and fabric and conversion of fabric into garment or apparel. The industry is well-established and vertically integrated; only the primary input, cotton, is almost entirely imported, as local farmers are unable to meet even 1% of Indonesia’s domestic demand.

The global industry size (by value, in US$ billion) of textile and apparel has been growing at a positive rate since 2010. In line with the international trend, Indonesia’s textile and apparel industry has also been grown at a CAGR of 3.7% since 2010. Indonesia’s textile and apparel industry is an export oriented, with most of its products traded to the countries like the US, China, Europe, Japan etc. Within textile and apparel, apparel is the most traded commodity. In 2014, Indonesia exported approximately 1.6% of global textile and apparel, representing ~10.7% of the country’s total non-oil and non-gas export.

Rise in the labor wage, fuel and electricity and raw material cost, old technology, dated infrastructure etc., are some of the factors hindering the growth of the Indonesian textile and apparel industry.

Young population and cheap labor wage, investments both from the Indonesian government and overseas companies, rise in the export of textile and apparel and presence of abundant number of upstream and downstream industries are some of the factors driving the growth of the industry.

Rise in domestic demand and increasing export of textile and apparel is expected to increase the size of the industry going forward as well.

In this detailed report, we have analyzed the industry with a holistic perspective by focusing on overview, growth drivers, challenges, government regulations, key players and finally where we see the industry five years down the line.