Among ASEAN countries, Indonesia has a huge population and market. Some Japanese companies believe that although countries such as Vietnam, Cambodia, and Myanmar have received great attention from the market in recent years, Indonesia is one of the countries that can achieve integrated production from raw material production to sewing. As the country’s advantages in product production become more and more has become more and more prominent, and orders have become increasingly stable. Recently, Japan’s Unitika Trading Company (UNITIKATRADING) established a company with legal person status in Indonesia, indicating that Japanese companies are increasingly active in entering the Indonesian market.
With the increase in Japanese companies, market competition has become more intense, but some companies still have high expectations. They said that the participation of Japanese raw material manufacturers has made the types of textile raw materials more diverse, and novel and interesting products can be developed through cooperation. In addition, in addition to attracting attention from companies as a production base, as Indonesia’s middle-income group continues to expand, the huge market of 250 million people is also very attractive. To this end, Japanese companies are working hard to overcome problems such as rising labor costs, traffic congestion, and rising fuel costs, and are actively building a stable production and sales base.
Textile companies actively invest to enhance product competitiveness
A tumultuous Indonesian presidential election has finally come to an end. The election of pro-democracy Joko Widodo as president has led many Japanese companies to generally believe that Indonesia’s political environment has stabilized and major incidents will not occur. Therefore, rising production costs are the main problem currently facing Japanese companies in Indonesia. Starting this year, electricity prices in Indonesia have increased by 40%, and policies show that fuel subsidies will also be gradually reduced, and the increase in corporate production costs continues to intensify. In addition, international issues such as rising prices of textile auxiliaries have prompted textile manufacturers and other companies that have been deepening their base construction in recent years to continue to transform their raw materials from general supplies to high-performance materials while carrying out energy conservation work.
DAIWABOGROUP regards Indonesia as a major fiber production base. It owns DAYANIGARMENT INDONESIA Company (hereinafter referred to as “DGI”), DAIWABOGARMENT INDONESIA Company (hereinafter referred to as “DAI”), which specializes in sewing processing, and PRIMATEXCO Company, which specializes in textiles, weaving and dyeing. including 5 subsidiaries and 2 joint ventures. DAIWABOGROUP collaborates with the head office and Daiwa Boshi Hong Kong Company, the headquarters of textile business in Asia, to achieve a 10% annual increase in production at the two sewing factories in Indonesia.
DAI Company, located in Central Java, expanded its production site in October, with the total building area expanding from 4,000 square meters to 11,000 square meters. In March next year, the number of employees will be increased to 1,000. In terms of production varieties, in addition to boxer briefs, the company has also begun to produce women’s shorts, and will start the production of pajamas, medical corsets and other products early next year.
DGI Company, located in the suburbs of Jakarta, will convert its product categories into value-added goods due to rising labor wages. The company reduced the production scale of conventional boxer shorts and turned to the production of shirts, quilts, medical corsets and other products. In terms of materials, it is not limited to cotton and polyester cotton. Polypropylene will also be used to produce fabric products to gradually improve product performance. In addition, in terms of woven fabrics, Indonesia has completed the construction of a vertical supply chain in the country. But in terms of knitted fabrics, Kunihiko Arichi, managing director of DaiwaboNeu, said that knitting-related businesses are relatively weak, so an integrated production system starting from weaving will be gradually built.
The cooperation between DAI Company and Daiwa Industries Hong Kong Company is continuously strengthening. In addition to selling fabrics, we also sell DAIWABONONWOVENINDONESIA’s non-woven products to China, Europe and the United States. Daiwa Bo Hong Kong Company was established in 2012. Today, the sales scale (this fiscal year) has reached 1 billion to 2 billion yen, and it will continue to be reused as a major link in global business in the future.
Nisshinbo Group is expanding its production scale through active investment. The total sales of three companies including NIKAWATEXTILE Co., Ltd. in the textile business, NISSHINBOINDONESIA Co., Ltd. in the weaving and processing business, and NAIGAITEXTILE Co., Ltd. in the sewing and processing business reached 14 billion yen in fiscal year 2014, and profits are expected to increase by 20%. Starting this year, NIKAWATEXTILE has introduced automatic doffing machines, two-for-one twisting machines, 9,000 spindles of small worsted spinning machines and other machines. The weaving workshop has also added 30 air-jet looms, achieving a scale of 300 looms. NISSHINBOINDONESIA has added a resin processing machine and plans to move the dyeing and processing equipment of the Miwa factory to the local area. It is expected that by 2016, the fabric output will increase from 2.2 million meters to 3 million meters per month. The sales of fabrics for uniforms and shirt fabrics for the European and American markets are quite good, and the production of APOLLOCOT fabrics with stable processing will start around August next year. NAIGAISHIRTSINDONESIA benefited from the introduction of uniform sewing equipment in 2012, and achieved double-digit growth in sales and profits. The production of APOLLOCOT shirts is also very stable. It is expected that in fiscal year 2015, the group will achieve sales growth of 10% and profits will double.
KUMATEX, the textile subsidiary of KURABO Group, takes advantage of its ability to provide high-quality elastic materials to strengthen sales activities in Indonesia, and plans to launch original brands of fabrics and finished products to increase visibility. Due to the pause in domestic demand, sluggish sales and rising costs in Indonesia, the company’s sales are expected to increase but profits will decrease this fiscal year. To this end, the company has invested in energy conservation and introduced equipment such as automatic doffing machines and new boilers. For sales, the company hires local�Increase. It is reported that the company’s advantage in controlling all aspects from raw materials to final products based on delivery time comes into play. The company will expand its unique TENCEL business in the future. Through cooperation with the technical staff of Lenzing Fibers Co., Ltd. (Lenzing Fibers), the dyeing quality of the products has become relatively stable. We have also increased our cooperation with GKBI Company (Gabungan Koperasi Batic Indonesia), focusing on expanding the trouser material business, and we hope to double the scale in the next fiscal year. times. In addition, the development of high value-added materials will be accelerated through cooperation with Japanese companies.
CHORIINDONESIA’s sales of fabrics, yarns and uniforms have performed well this fiscal year, and it is expected to achieve the goal of increasing revenue. Among them, the sales of robe fabrics for the Middle East are quite good, and it plans to expand the sales business of robe sewing products. In terms of yarn, sales to Japanese car seat cushion manufacturers have increased, and the production of medical uniforms has also stabilized. Since the beginning of this year, the company has also increased staffing and focused on developing local knitted garment production bases. In addition, the chemicals business, which accounts for about 45%, also has good performance, and the business volume is expected to reach 10 billion yen this fiscal year. At the same time, the improvement of the production system is also underway. The black dress production line currently has a production scale of 3,000-5,000 sets. The production line will be increased by about 6,000 sets within the year to reach the scale target of 10,000 sets. Urasprima, a domestic dyeing and processing factory in Indonesia that is a joint venture with dyeing and processing companies such as Urase Co. (Sabae City, Fukui Prefecture) and other companies, is still under construction, but it plans to start trial dyeing processes within this year.
TEIJINFRONTIER INDONESIA is improving its sewing base in Indonesia in its specialty areas such as formal fabrics and sportswear fabrics. It plans to start producing women’s formal wear next year. It will set up two production lines in a Japanese sewing factory about 2 hours away from Bandung City, and will increase the output of 2,000 pieces per month. In terms of the polyester filament yarn knitted fabric business for sportswear, integrated production has been achieved in Indonesia, with a production capacity of 300,000-400,000 pieces per season. The company will also concentrate its production parts located in Bogor and Solo areas to the Solo area and utilize the cooperative factories in Tangeran to seek a stable production environment. The joint venture factory with ADETEXGROUP also started operation in October and can produce about 700 pairs of loose trousers per day. Although sales are expected to decrease this fiscal year, profits will increase. In the future, the company will focus on developing materials that use SOLOTEX for loose pants and shirts. In addition to starting to sell uniform fabrics to Japanese companies, the company also plans to cooperate with Japanese online sales companies to start the production and sales of children’s clothing.
Lingyi Commercial Co., Ltd. is focusing on expanding the variety of raw materials by increasing the number of woven fabric operators and participating in the material development of local companies. The company expressed confidence in the future and believed that the trend of “China + 1” has tended to ease. Only by discovering the advantages of enterprises can they truly survive, and this will be more obvious next year. At the same time, the increase in the minimum wage for workers has been mitigated by the depreciation of the Indonesian currency, the rupiah, so it can continue to exert its cost advantage. About 70% of the products sold by Lingyi are knitted garments. Since Indonesia has a large young labor force that can carry out sewing business, it plans to expand the scale of knitted pullovers in the future. The company also said, “Because there are many products produced in large batches, various information also comes while cooperating with each factory. And because the foundation is relatively solid, small batch production can also be accommodated.” This fully demonstrates the advantages of trading companies in Indonesian production.
