According to the Indonesian Filament and Fiber Producers Association (APSyFI), 70% of Indonesian textile and textile products (TPT) companies are facing permanent closure due to the COVID-19 epidemic. 80 per cent of the textile companies have temporarily suspended operations due to cash flow problems.
So financial support from the government is urgently needed, according to the Indonesian Filament and Fiber Producers Association (APSyFI).
“We have cashflow difficulties because even though we have no income, we still have to pay penalties to the state electricity and gas companies while also paying our workers’ social security fees,” APSyFI secretary general Redma Gita Warawasta said in a press release.
The association warned that the closure of massive business could lead to higher unemployment, as about 1.8 million TPT industry workers are already furloughed or laid off because of the pandemic.
According to the latest estimates from the Ministry of the Industry, the TPT industry employs around 135,000 workers annually, making up 22.5 percent of the total 600,000 workers in the industrial sector.
Redma said APSyFI and the Indonesian Textile Association (API) had conveyed their request for relaxation policies from the government but without any significant development.
One of the associations’ requests includes fine/penalty fee waivers from state electricity company PLN and state gas company PT PGN for textile companies with electricity and gas consumption below the minimum threshold.
“Our request for penalty fee waivers is reasonable because the government has declared [COVID-19 pandemic] a national disaster. But in reality, neither PLN nor PGN regard the pandemic as a national disaster and they are still imposing penalty fees,” the APSyFI statement reads.
The association also complained about the non-exemption of the financial sector in textile companies. even though the Financial Services Authority (OJK) has issued regulation No.11/2020 on credit restructuring for companies impacted by the pandemic.
“There could be a spike in nonperforming loans from the TPT industry if the situation continues,” Redma said.