National Textile Industry Growth Under the Shadow of Basic Electricity Rate Rise

INDUSTRY.co.id - Jakarta - The government's plan to change the formula for non-subsidized electricity tariffs by including coal prices as one of the basic electricity tariff calculation components (TDL) has come under fire from textile entrepreneurs incorporated in the Indonesian Textile Association (API).

Understandably, the price of coal is smoldering. For the February contract at Newcastle today, the price of coal reaches 107.7 US dollars per ton while in the Rotter market and the price is around 90.85 US dollars per ton.

Vice President Director of PT Pan Brothers Tbk (PBRX) Anne Patricia Sutanto said the change in TDL formula has the potential to make non-subsidized electricity tariffs, including industrial electricity. The increase has a big impact because the textile industry, especially in the upstream sector requires considerable electricity.

"Later, most of which will be affected in the upstream, the highest investment in which it requires energy so it will require higher electricity than clothing or garment," said Anne at Menara Kadin Indonesia, Jakarta (31/1/2018).

Anne added, the Indonesian Textile Association (API) was observing the plan of the ESDM Ministry. He also hopes, the policy issued by the government does not burden the industry.

"We will ask the government to see benchmarks from other industries in other countries because we must be competitive from the domestic side not only domestic but also outside," he said.

According to him, so far the textile industry is dependent on exports. Meanwhile, the national textile industry is facing tough competition from neighboring countries such as Vietnam which is very efficient, especially in terms of workers' wages.

"The government should encourage the national textile industry to compete in the global market, we must ensure that our industry of Indonesia industry can really compete domestically and abroad," said Anne.

For that, continued Anne, it also considered to discuss with the Ministry of Industry regarding this new policy plan. "This discussion also analyzes the impact of electricity tariff increase on textile industry," he said.