JAKARTA. The domestic spinning industry is difficult to develop. The reason for this is, among other things, the less competitive yarn products produced domestically compared to foreign spinning industry yarn products, such as China and India.
The high cost of production is a classic problem that continues to occur and has not received a solution. The price of gas fuel, as well as electricity tariffs for industry which are still high, need to find a solution immediately.
In addition, the rampant seepage of thread products from bonded zones has further aggravated entrepreneurs. As is known, industries that are located in bonded zones receive fiscal facilities. Some of them are exceptions to the payment of Value Added Tax (VAT).
Not surprisingly, as a result of this condition production capacity in the yarn spinning industry is far from the maximum limit. Citing data from the Association of Indonesian Fiber and Filament Yarn Producers (APSyFI), factory utilization last year only reached 1.54 million tons or 70% of the installed capacity of 2.2 million tons.
In fact, this year the used capacity of existing factories is expected to decrease again. "Until the end of the year, it is estimated that utilization will only be 60% or can only produce around 1.4 million tons," said APSyFI Secretary General Redma Gita Wirawasta, when contacted by KONTAN, Thursday (20/7).
Redma did not deny that under these conditions several APSyFI member spinning companies were forced to reduce production or close their businesses. But unfortunately, Redma cannot further detail the names of these companies.
What is certain, according to Redma, is that the performance of the spinning industry is declining. In fact, many have to swallow losses because they sell their production below the ideal price. “They are forced to sell at a loss rather than piling up in warehouses. Even though they also have to pay for suppliers, electricity and labor wages," said Redma.
Oversee Bonded Zones
PT Asia Pacific Fibers Tbk Corporate Communication Prama Yudha Amdan said that the issue of the spinning company going out of business was true. The indicator is the demand for fiber as a raw material for spinning shows a downward trend.
Just so you know, this issuer with the code POLY stock produces fiber which is sold to spinning manufacturers in the medium industry to be processed into yarn. "As a result, there is a declining demand for fiber," said Prama.
In order for the yarn spinning industry to survive, APSyFI proposes that the function of the Bonded Zone be returned to its original state. Supervision of the industries in the bonded zone needs to be tightened so that it is in line with its objective, namely 100% sales for export. Equally important, electricity tariffs and gas prices must be realized according to economic value.
