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JAKARTA
KalimantansulawesiNusa tanggaraPapua
SMART TEXTILESINVESTMENT
bkpm.go.id
The overall textile industry has recovered vigorously from the 2008 crisis.
The overall textile and footwear industry is recording a steady growth supported by high domestic and regional demand.
As reflected by the steady textile output growth (CAGR 5%) to reach IDR 63.5 trillion (US$ 4.5 billion), Indonesia has become a regional base for basic garment to fashion and smart textile industry.
Why IndonesiaMarket opportunities
Indonesia is evolving from a place to source fashion and sportswear suppliers to a primary market.
The synthetic fibre industry has been a major positive contributor to the recovery.
In addition of an overall growing textile industry (+7.5%, 2013), the demand as been increasingly important in higher value added textile products made from synthetic fibre – with a yearly growth rate comprised between 2.5% and 14% in the recent years.
Indonesia’s textile industry can count on strong sectors such as petroleum, plastics and chemicals to support its growing smart-textile industry
16thIndonesia as exporter of
textiles worldwide
10thIndonesia as synthetic fibre
producer worldwide
23thIndonesia’s world rank oil producer
852k barrels per day (2014)
900number of large and medium
manufacturing in the chemicals
industry
3rdChemicals sector’s contribution
rank to manufacturing industry
1500Number of large and medium
manufacturers in the rubber and
plastics industry
2.3VALUE OF ELECTRICAL & ELECTRONIC
EQUIPMENT IMPORT IN 2014
BILLION
4.7GDP GENERATED BY THE TEXTILE
INDUSTRY
BILLION
Textile and footwear ‘s output contribution to Real GDP, base Year 2010 (IDR Trillions)
2010 2012 2013 201420110
10
20
30
40
50
60
70CARG 5% 9.1%
Textile industry’s contribution to the Non Oil & Gas manufacturing
sector
0
-5
-10
-15
5
10
15 2009 2010 2011 2012 2013
Synthetic Fiber Yarn & Woven fabric
Knitting
Total industry Growth (%)
Apparel Other textile
Source: BPS analysed by Ministry of Industry (2014)
Textile and Textile Product Industry Growth (%)
Supporting sectors
rank
rank
US$
US$
ABOUT INDONESIA
255 million (4th) US$ 943 Billion
19th
Joko WIDODO (2014)
US$ 10,641 124 million
BAHASA INDONESIA
6.4%
US$ 581 billion US$ 598 billion US$ 28,500 million US$ 7,077 million
POPULATION
SumatraJava
GDP
Economy rank
REpublic of Indonesia
South east asia
President
GDP per capita Labour force
Language
INFLATION
imports EXPORT Inward FDI outward FDI
Archipelagic nation13,466 islands spanning over 6,500km. Java is as big as England
+100 million active monthly smartphone users by 2018**e-Marketer (2015)
Indonesia represents
40% of ASEAN’s population
Home to a digitally-savvydiscerning and aspirational consumer base.
55% of Indonesians are from the middle income group, growing from 140milion in 2014 to 150million people by 2030.
3rd largest Facebook mobile phone audience*
Business environment (2015) Sector (% GDP)
S&P: BB+Moody’s: Baa3
Fitch: BBB-OECD: 3
SIN: 1h40BKK: 3h30KUL: 2h50
HKG: 5hrsPEK: 7h20HRT: 7h20DOH: 10h55
AMS: 14h20 LHR: 14h55
JFK: 26h+LAX: 18h33GRU: 24h++
SYD: 6h50
Investment grades: Primary: 12%
Manufacturing: 25%
Trade & Hospitality: 18%
Transport & communication: 11%
Finance, real estate, business services: 10%
Mining & Quarrying: 7%
Construction: 7%
Other services: 10%
ASEAN Asia
Europe Americas
OCEANIA
Indonesia’s rankings:Doing Business: 109th (5)(Brazil 116th / India 130th)
Global Competitiveness: 37th
Prospective host emerging economy: 3rd
(Philippines 47th / Vietnam 56th)
(Brazil 4th / Mexico 5th)
Badan Koordinasi Penanaman Modal (BKPM) Jl. Jend. Gatot Subroto No.44 Jakarta 12190, PO Box 3186Indonesia +62 21 5252 008 [email protected] www.bkpm.go.id
This leaflet has been developed with the support of:
Source: WEF, UNCTAD, BPS, World Bank, Rating Agencies, BKPM
Flying time from CGK to:
20102011
20122013
20142015
20162017
20182019
20202021
20232022
FORECAST
0
10
20
30
40
50
60
80
90
A fast-growing middle-class driving the demand for hi-tech clothing and footwear
Indonesia capabilities Key organizations to support your business.
Location: where opportunities lie
Many companies are already tapping into Indonesia’s fast-growing smart textile industry
Household spending on clothing and footwear as been increasing steadily over the past
decades, driven by a growing middle class. The increase is set to continue over the next
decade with an estimated annual average growth of 5.7% (Oxford Economics, 2014).
Measured at US$ 52 billion in 2014, the spending on clothing and footwear should reach
US$ 90 billion by 2024.
A cost effective location.
Of the total 255 million population…
Indonesia is the 2nd most cost-competitive country among the 7 major ASEAN markets
when it comes to labour costs for a typical Textiles Manufacturing Plant*.
The majority of Indonesian textile establishments are concentrated on the island of Java.
39% of the establishments are located in West Java, 23% in Central Java, and 13% are
based in Jakarta.
* Based on a textile manufacturing plant of 900 people, comprised as follows: 680 low-skilled
production operatives; 130 skilled production operatives; 29 highly-skilled production operatives; 20
warehouse and distribution operatives; 15 secretaries; 10 quality control specialists; 10 engineers;
2 facilities and office service specialists and 1 of each of the following: head of manufacturing; head
of quality assurance; production manager and a quality control manager.
Indonesia’ s consumer spending on clothing and footwear, billions US$ (PPP)
Indonesia’s middle class on the rise, in number of households by income band
20070.0
5,000
10,000
15,000
20,000
20082009
20102011
20122013
20142015
20162017
20182020
2019
$10,000 - 20,000FORECAST
$2,000 - 5,000
$5,000 - 7,500
$7,500 - 10,000
$20,000 - 35,000
$35,000 - 70,000
$1,000 - 2,000
$70,000 - 1000,000
Key employment and education indicators:
Textiles Manufacturing Plant*
committed Government to fully support your projects
Indonesian FDI in clothing and footwear manufacturers have been supplying for global organisations including:
30
145
% of investment valueReduction of corporate net income tax for 6
years, 5% each year.
Under certain requirements among others: minimum amount of investment value and workforce, and certain project location (especially outside Java island).
A variety of sectors are covered in this regulation.
2 years import duty exemption or 4 years for companies using locally produced machines (30% - 40%)
Industries which produces goods and/or services, including:• Tourism and culture • Public transportation • Public health services• Mining • Construction • Telecommunication • Port
previously it was for 10 years and it can now be extended up to 20 years.
Ratio of tax holiday: 10%-100%
Period of tax holiday:
Minimum amount of investment:
5-15 years
IDR 1 Trillion
Machine, goods, materials for production
Business segments
Smart textile - investment bkpm.go.id
15.5are in the manufacturing
sector
million (15%)170
are of active working age
million (67%)12
are tertiary-level educated
million
5.8%Unemployment rate
4%Forecasted CAGR of workforce
absorbed by the textile industry
868,000NUMBER OF GRADUATES per year
2,400Number of large and medium
manufacturers in the textile industry
Fiber manufacturers:
( NATO uniforms (through PT Sritex)
( Nike
( New Balance ( Forever 21 ( H&M
( Zara ( Guess
( Lenzing / PT. South Pacific Viscose (SPV)
( Nagatex, in partnerships with Clariant and BASF
( Toray Synthetics
Source: Oxford Economics estimates derived from National Bureau of Statistics - Indonesia
Source: fDi Benchmark (Financial Times)
Source: BKPM (2014)
Source: WEF, BPSSource: Oxford Economics estimates derived from Statistics Indonesia and the Standardized World Income Inequality Database
Labor costMyanmar
Indonesia
Vietnam
Philippines
Malaysia
Malaysia
Singapore
0M 2M 4M 6M 8M 10M 12M 14M 16M
USD - United States Dollar
Key Industry Ministries and Associations
Universities and centres of excellence
Ministry of Industry www.kemendag.go.id
Ministry of Trade www.kemenperin.go.id
Indonesia Footwear Association (Aprisindo)www.aprisindo.or.id
Academy of Leather Technology www.atk.ac.id
Indonesian Chamber of Commerce and Industry www.kadin-indonesia.or.id
Ministry of Finance, Diretorate General of Customs and Excisewww.beacukai.go.id
Indonesian Tanners (leather) Association (APKI) www.indonesiantanners.com
Technical Institue of Bandungwww.ftmd.itb.ac.id
Indonesia Textiles Association (API)www.apidki-jakarta.weebly.com
Trisakti UniversityFaculty of Engineeringwww.trisakti.ac.id
Center of Leather, Rubber and Plastics (under Ministry of Industry)www.bbkkp.go.id
Indonesian Synthetic Fiber Producers Association (APSyFI)www.fiber-indonesia.com
College of Textile Technology (STTT) www.politeknikstttekstil.ac.id
IDR 223.8 TRILLIONSUmatRA IDR 67.8 TRILLION
KALIMANTAN
IDR 1 TRILLIONNUSA TENGGARA
IDR 22.4 TRILLIONSULAWESI
IDR 25 TRILLIONPAPUA
IDR 1,517.3 TRILLIONJAVA
The government has projected targets of investment in the manufacturing sector
between 2014 and 2019 as per the locations shown below:
JAKARTA 13%Central java 23%
WEST JAVA 39%
Indonesian Business Association (APINDO)www.apindo.or.id
TAX ALLOWANCE TAX HOLIDAY IMPORT DUTY FACILITY
(Government Regulations No.18/2015 and No.9/2016)
(MoF Regulations No. 159/PMK.010/2015 and No.103/PMK.010/2016)
(MoF Regulations No.176/PMK.011/2009 and No. 76/PMK.011/2012)