Indonesia: Field Research And Personal Experience Of Chinese Textile Enterprises

On January 2, 2023, with the RCEP Agreement coming into force for Indonesia, China and Indonesia will mutually implement the RCEP tariff rate. On the basis of the China ASEAN Free Trade Area, Indonesia will grant zero tariff treatment to more than 700 tariff lines of products in China, including footwear and clothing products.

2023 is the tenth anniversary of the establishment of a comprehensive strategic partnership between China and Indonesia, the tenth anniversary of General Secretary Xi Jinping's proposal of the "21st Century Maritime Silk Road" in Indonesia, and the first year of jointly building a China Indonesia community of shared future. The Chinese textile and clothing entrepreneur delegation, jointly organized by the China Council for the Promotion of Textile Trade and the China Knitting Industry Association and led by Lin Yunfeng, president of the China Knitting Industry Association, will conduct a survey on Indonesia's textile and clothing industry and investment environment from June 20 to 26, 2023. Li Jie, Vice President of China Cotton Textile Association, and 38 outstanding entrepreneurs from Jiangsu Jinchen, Haining Chaoda, Shanghai Jialinjie, Jilin Northeast Socks Industry, Qingdao Phoenix, Wuxi Simian, Jiangsu Zhongyuan, Dali (China), Zhejiang Wanyi and other industries visited together, covering cotton spinning, chemical fiber, knitting, printing and dyeing, clothing, textile machinery and professional markets, Basically covering the whole industrial chain of textile and clothing.

Joint meetings

The China Indonesia Textile and Garment Industry Exchange Conference co sponsored by the China Council for the Promotion of Textile Trade, the China Knitting Industry Association and the Indonesian Textile Association was held in the Indonesian Chamber of Commerce and Industry. Zhu Yingmin, representative office of China Council for the Promotion of International Trade in Indonesia, Juan Permata Adoe, vice chairman of Indonesian Chamber of Commerce and Industry, and more than ten local textile and garment enterprises from Indonesia attended the meeting.

Jemmy Kartiwa Sastraatmadja, President of the Indonesian Textile Association, extended a warm welcome to the delegation and presided over the meeting.

Lin Yunfeng introduced that Indonesia is the fourth most populous country in the world and the largest economy in ASEAN. It has a good textile and clothing industry foundation and huge market potential, attracting international market attention. At the same time, Indonesia and China have strong complementarity in the field of textile and clothing. Indonesia imports a large number of fabrics from China every year and exports ready to wear to China, The enterprises of the two countries have frequent trade exchanges and have a wide range of cooperation opportunities in various fields. He introduced the overall situation of China's textile and clothing industry and its position in the world through some figures, hoping to take this opportunity to understand the overall investment environment of Indonesia through field research, and establish a good cooperative relationship with the Indonesian industry.

Anne Patricia Sutanto, vice president of the Indonesian Textile Association, mentioned in her speech that Indonesia is an inclusive and diversified country. Indonesia welcomes Chinese investors and is very willing to cooperate with Chinese enterprises for mutual benefit and win-win results. At the same time, Indonesia hopes to establish a good bridge relationship and mutual trust mechanism through joint efforts of the Chinese and Indonesian associations, Promote the development of textile industry in both countries.

At this meeting, Mr. Cahyo Purnomo, Director of East Asia, South Asia, Middle East and Africa Affairs Department of the Ministry of Investment of Indonesia, was specially invited to introduce Indonesia's investment opportunities and relevant policies. Mr. Cahyo mentioned that China has always been the second largest source of investment in Indonesia. From 2018 to 2022, China's direct investment in Indonesia totaled 23.35 billion US dollars, an increase of 56.8% in four years. Then Mr. Cahyo also focused on the details of various preferential policies enjoyed by the textile and clothing industry for investment in Indonesia, as well as the optional industrial zones across the country, and said that at present, Central Java has become the preferred place for investment in Indonesia's labor-intensive industries.

Majalengk Industrial Park and Aviarna Industrial Park in Semarang from West Java also shared the details of their respective industrial parks at the meeting.

At present, Shanghai Jiale, a Chinese textile enterprise that has successfully invested in Indonesia, shared its investment experience and issues that need special attention when investing in Indonesia.

In the Q&A link, the delegation asked the speakers about the issues that their enterprises concerned and cared about, including industrial costs (including water and electricity prices), energy, environmental protection, labor, relevant investment preferential policies, and the current development of relevant products in Indonesia. The communication link was warm and meaningful.

Visit local enterprises

In Solo, Central Java, the delegation also conducted in-depth research on the leading enterprises in the whole industrial chain of Indonesian textile and clothing.

　　1、Sritex

Sritex was founded by Mr. Haji Muhammad Lukmintoin 1966, an overseas Chinese, in Solo, Central Java. After decades of development and innovation, it has become the largest vertical integrated textile enterprise in Southeast Asia, covering the whole industrial chain of viscose, spinning, weaving, dyeing and finishing, printing, finishing and clothing. Its products are exported to more than 100 countries and regions. The Group has 10 branches in Indonesia, More than 50000 employees. Mr. Iwan, the president of the Group, attached great importance to the delegation. He not only received the delegation in person, but also had in-depth one-on-one exchanges with representatives of several enterprises with cooperation intentions.

　　2、Dan Liris

Dan Liris started from weaving in 1974 and rapidly expanded its business to spinning, dyeing, finishing, printing and garment weaving in 1976. At present, Ms. Michelle Tjokrosaputro, the third generation, takes the helm and manages more than 6500 employees. Mr. Hendro Suseno, Chief Financial Officer, mentioned that due to the impact of the global economy, the company's revenue has declined by about 20% - 30% this year, so he very much hopes to have the opportunity to cooperate with Chinese enterprises and seek common development. Then the delegation visited its printing and dyeing factory.

　　3、Pan Brothers

Pan Brothers was founded in 1980 and listed on the Indonesian Stock Exchange in 1990. More than 20 factories are located all over Java. At present, there are nearly 30000 employees. The ready-made clothes include various sports functional clothes, various T-shirts and casual clothes, which are mainly exported to Asia, America, Europe and Oceania. Customers come from global fashion and sports brands. After the introduction, Ms. Anne Patricia Sutanto, Vice President of the enterprise, listened carefully to various questions from the delegation enterprises and patiently communicated with them. The delegation also visited its factories for Adidas and Uniqlo, as well as small supplier exhibitions held regularly. The delegation enterprises unanimously agreed that the enterprise has orderly management and high-end product quality, and many of them have a strong intention to cooperate with the company.

Investigate West Java Industrial Park

After landing in Indonesia, the delegation set out from the airport to Suryacipta Industrial Park in Karawang area near Jakarta without stopping. Mr. Abednego Chan Purnomo, its vice president, explained the overall situation of Karawang Industrial Park and the situation of Subang Smartpolitan Park under development in the conference room, and communicated with the delegation enterprises on issues of concern.