Thus, we urged you to not manipulate the data or conduct any corruption, collusion, and nepotism.
Jakarta (ANTARA) - The Industry Ministry launched the machinery/equipment restructuring program for the fabric refinement and printing industry to support performance of the textile and textile product (TPT) industry impacted by the COVID-19 pandemic.

"We launched the program as one of the incentives for the textile industry sector to improve its performance amid the pandemic as well as part of the implementation of the Making Indonesia 4.0 roadmap," Industry Minister Agus Gumiwang Kartasasmita stated at the virtual launch and dissemination of information on the program here on Wednesday.

The Making Indonesia 4.0 roadmap is a plan to revitalize the national manufacturing sector by using the industrial technology 4.0 and is expected to boost the global competitiveness of domestic industries.

Furthermore, the minister noted that the TPT industry was one of the strategic industrial groups and national priorities in accordance with the National Industrial Development Master Plan (RIPIN). It earned $10.55 billion from exports and absorbed 3.43 million workers in 2020.

In the second quarter of 2021, the sector still experienced a contraction of 4.54 percent year-on-year, albeit a slight improvement of 0.48 percent as compared to the previous quarter.

However, the sector's exports during the January-June 2021 period had increased by 13 percent to reach $5.87 billion, while investment recorded a rise of 27 percent.

Hence, although the industry was battered by the pandemic, the ministry believed that the program will be able to boost efficiency and productivity of the sector.

"In August, contraction in the manufacturing sector as the result of enforcement of the community activities restrictions had subsided as the Purchasing Managers' Index of Indonesian manufacturing stood at 43.7. Moreover, it has increased as it reached 40.1 in July," the minister noted in a written statement.

It is the continuation of the same program implemented in the textile, footwear and leather industry during the 2007-2015 period.

Implementation of the program during the period had a positive impact on the industry's performance, with an increase in the machinery/equipment investment of Rp13.82 trillion, the textile industry production capacity by 21.75 percent, production realization by 21.22 percent, the energy efficiency value of 11.86 percent, the sales volume both domestically and of exports by 6.65 percent, and the number of workers of 28,295 people.

Hence, the ministry reissued the policy in 2021 to enhance the technology in the textile industry to boost efficiency and productivity of the sector.

“The implementation of this policy is based on Regulation of the Industry Minister Number 18/2021 on the Restructuring of Machinery and/or Equipment in the Fabric Refinement Industry and the Fabric Printing Industry,” Kartasasmita stated.

The 2021 machinery/equipment restructuring program will focus on the fabric refinement industry and the fabric printing industry in a bid to address the weakest segments in the structure of the textile and textile product industry while strengthening the capacity and productivity of the industry in order to achieve the 35-percent import substitution target by 2022.

The import substitution program aims to reduce import dependence and strengthen domestic industries by encouraging production and investment of substitute goods in domestic industries as well as implementing the 40-percent local content requirement policy.

Meanwhile, the machinery/equipment restructuring program is implemented on account of the fact that the largest share of imports in the textile sector is that of finished fabric products, reaching 48.4 percent of the total imports of the TPT industry of $7.2 billion in 2020, the minister stated.

Furthermore, Kartasasmita remarked that the program will utilize the government's budget that will be accounted correctly, legally, and transparently.

"Thus, we urge you to not manipulate the data or conduct any corruption, collusion, and nepotism," he affirmed.

Director General of Chemical, Pharmaceutical and Textile Industries at the ministry Muhammad Khayam explained that the program was implemented by providing 10-percent reimbursement of the total investment for the imported machinery or equipment or 25 percent for domestic machinery or equipment.

"The available budget allocation for the 2021 fiscal year reaches Rp3 billion, with a target of at least six companies participating in the program. If there is any additional budget, the target will be increased," he stated.

Information about the machinery/equipment restructuring program has also been disseminated through the ministry's website as well as the National Industrial Information System accounts of every company that has the Indonesian Standard Industrial Classification 13132 and 13133.

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Translator: Risbiani Fardaniah, Uyu Liman
Editor: Sri Haryati
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