2008-2009 DATA CONSULT. All rights reserved.
MARKET INTELLIGENCE REPORT ON

DEVELOPMENT OF SPINNING INDUSTRY IN INDONESIA

October 2009

Next>>

Current Issue

Indonesia’s textile and textile products are fairly competitive both in international and domestic markets  as the country operates integrated industries  consisting of upstream, midstream and downstream industries spinning, weaving, knitting  and garment /finished wear industries. Indonesia has the largest spinning industry in Asia and Oceania and the second largest weaving industry after China. The country’s finished wear products have been well known in international markets. 

The country’s spinning industry has expanded considerably in the past several years marked by the increase in production which surged from 1,872,000 tons in 2006 to 2,199,000 tons in 2008. Meanwhile, the capacity utilization of the country’s spinning industry rose to 80.9% in 2008 from 78.1% in 2006. 

However, exports of the country spinning products have declined in the past several years to 679,000 tons valued at US$ 1,720 million in 2008 from 870,000 tons valued at US$ 1,785 million in 2006. The decline in exports followed the global crisis that badly weakened demand in the world market for textiles and textile products.

The crisis began in the United States, which is the largest market for the country’s TPT products. The country is forced to seek market expansion to other regions such to Europe, other Asian countries, and Middle East. As a result, 2008, there was excess in supply of rayon fibers in the European Union (EU). Many buyers from that region then postponed or stopped new orders from Indonesia. Around 80% or valued at US$ 1,375 million worth of Indonesian yarns are exported to the EU, with the rest exported to Brazil and other countries in America and Asia. 

The cut in imports by the European Union forced the producer’s rayon fibers in Indonesia to reduce production and exports. At the same time the prices of basic materials in the form of fibers rose adding to the problem faced by local spinning industry. 

Description of product 

Textile yarns are a composition of staple or filament fibers either natural or synthetic fibers to be used as basic material for fabrics.  

By the composition of the fibers, there are various types of textile yarns including   cotton, rayon, jute, wooden, silk linen, nylon, polyester and acrylic yarns.  

Rayon yarns are processed from synthetic fibers which are regenerated that they are the same in structure as other cellulose fibers. 

One of the natural characteristic of rayon fiber is that it is highly dazzling and its color is whiter than cotton yarn. 

There are two types of rayon yarns: 

  • Filament Rayon yarn, which is produced from a group of (15 -120) rayon fibers having limitless length excepting for fabric having certain effect such as voile and crepe. 
  • Staple Rayon yarn, which is produced from cuts of filament rayon with certain length to fit with the length of cotton fiber or woolen fibers to be spun. 

Generally the rayon yarn is used as follows: 
  • Rayon yarn from kupromunium rayon fiber is used specially as basic material for soft fabric with high quality, stockings and lady’s underwear (lingerie), knitted undershirts and woven batik shirts. 
  • Rayon yarn from viscose rayon fibers is sued for embroidered garments and for layer.
 
Characteristics of products 

Spinning industry as an intermediate industry produces textile basic materials including cotton, rayon, acrylic and polyester staple fibers into yarns.  

Spinning industry produces various types of yarns from different basic materials. The yarns are used by weaving industry to produce woven fabrics and by knitting industry to produce knitted fabrics 

Spinning industry  uses a number  types of  machines  for  spinning process  including blowing, carding, pre drawing, lap former, combing, drawing, speed, ring spinning, winding machines. 

a. Blowing and carding process

In the process of blowing and carding, cotton or polyester fibers are put into the blowing machine to disentangle the fibers, and clean them from any undesired materials, and shake them to form a homogenous blend of different types of cotton fibers. The process turns out what is called “Lap”, which is processed further in the carding machine to turn out "Sliver".

b. Combing, Drawing and finishing process 
This process follows the blowing and carding process to straighten and make parallel the fibers, make perfect the mixture. This phase also produce a blending between polyester and cotton through Drawing process.

c. Ring Spinning and Finishing
This phase prepares spun yarns   in the form of "Cones" with Mach Conner machine. 

Based on the Harmonized System (HS) of tariff category the spinning products of cottons and polyester are included in the following HS: 

Production capacity and producers 

a. Production capacity up 3.2% per year on the average 
From 2004 to 2006, the production capacity of the country’s spinning industry remained the same at around 2,397,000 tons per year. There was no new factory and capacity expansion by the existing producers. 

In 2007, the capacity grew 6.6% boosted by growing demand to 2,555,000 tons per year and in 2008; the capacity grew further by 6.3% to 2,716,000 tons per year.  
                                
b. Number of machines up 

Based on at the Industry Ministry, the country’s spinning industry had 7,803,241 spindles and 90,000 units of rotor in 2006.  Around 64.4% or 5,025,287 units of the 7,803,241 spindles were unfit. The weaving industry had 204,393 weaving machines or 82.1% of the total units of 248,957 machines needed replacing with only 44,564 units fit for operation. 

In line with the program to restructure the textile and textile industry, there was addition of spinning machines. In 2007, the number of spindles grew to 7,854,000 units and that of rotors rose to 110,000 unit. The increase in the numbers of machines pushed up the country’s production of textile and textile products to meet growing market demand in the country and the world. 

c. Capacity utilization 80.9%

In the period of 2004-2008, the capacity utilization of the country’s spinning industry grew 3.7% per year – from 67.7% in 2005 to 80.9% in 2008.  See the following table. 
           
d. Producers and production capacity

Based on data from the Industry ministry, the country has 204 companies operating in spinning industry but most of them are small scale producers. 

The global crisis has dampened demand for yarns in the world market especially in the United States. A number of producers of textile and textile products had been forced to stop production and some other lay off many of their workers.  Among the producers stopping production is PT Malaktex. 

Profile of main players 

Next>>
 
MONTHLY REPORT
INDONESIAN COMMERCIAL NEWSLETTER (ICN)
HOME            Head Line            Focus            List of Contents          To Subsrcibe   
Related Topics

ICN - October  2009

FOCUS: INADEQUATE INFRASTRUCTURE DISCOURAGES INVESTMENT

INDUSTRY PROFILE: DEVELOPMENT OF SPINNING INDUSTRY IN INDONESIA

INDUSTRY : DEVELOPMENT OF WEAVING INDUSTRY
  • Backgrounds
  • Main producers
  • Only a few of weaving machines modernized
  • Production sluggish
  • Imports up on growing downstream industry
  • Consumption
  • Prices
  • Investment
  • Prospects and Conclusion