Prabowo Urges State-Owned Banks to Finance Textile Industry Machinery Upgrades
President Prabowo Subianto has directed member banks of the Association of State-Owned Banks (Himbara) to resume providing financing to the textile and textile products (TPT) industry, particularly for the renewal of ageing production machinery.
Speaking at the Presidential Palace Complex in Jakarta on Tuesday, the CEO of the Daya Anagata Nusantara Investment Management Agency (BPI Danantara), Rosan Roeslag, stated that this directive is part of an effort to enhance the competitiveness of the national TPT industry.
“From our perspective at Danantara and regarding investment, alongside Mr Doni, instructions have been given on how we approach this, starting with the banking sector. Because in the past, banking viewed this as a ‘sunset industry’, we are now reversing that so that Himbara banks and other national banks provide loans, specifically for the purpose of upgrading quite old machinery,” said Rosan.
According to him, machinery renewal is essential to increase the competitiveness of Indonesian textile products when facing products from other nations.
The government is also discussing the provision of incentives for the TPT industry, including tax holidays for specific periods and tax allowances.
In addition to financing support and incentives, Rosan noted that Danantara will prepare a special zone that integrates the TPT industry from upstream to downstream.
“We at Danantara will also prepare a special area for upstream-to-downstream integration to ensure greater efficiency through the use of proper, high-quality technology, so that our products possess better competitiveness,” he added.
Previously, the Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that President Prabowo is encouraging the strengthening of the national TPT industry because the sector plays a vital role in economic growth, employment, and exports.
The strengthening of the TPT industry was one of the agendas discussed during a limited meeting led by the President with several ministers and officials at the Presidential Palace in Jakarta on Tuesday.
According to Airlangga, several measures were discussed to increase the competitiveness of the TPT industry, ranging from the harmonisation of tariffs from upstream to downstream sectors and easing access to raw materials, to the regulation of import practices that disrupt domestic industry.
The government also discussed the restructuring of TPT companies to encourage reinvestment and strengthen working capital.
Airlangga noted that the TPT industry currently contributes approximately 0.97 per cent to the Gross Domestic Product (GDP), employs around four million workers, and records an export value of approximately 12 billion US dollars.