JAKARTA – The Indonesian government plans to revive a state-owned enterprise (BUMN) in the textile sector to face both external and domestic challenges.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that the plan follows discussions and directives from President Prabowo Subianto during a limited meeting in Hambalang last weekend.

According to Airlangga, Indonesia has re-mapped the industry roadmap to identify sectors most vulnerable to the impact of trade tariffs. These include textiles, textile products, footwear, garments, and electronics.

Specifically for the textile and textile products sector, Airlangga noted that Indonesia has weaknesses in the value chain, particularly in yarn production, fabrics, dyeing, printing, and finishing.

“We must push to revive this, and the President reminded us that we used to have a state-owned textile company, and it will be brought back,” Airlangga explained during a press conference on Thursday.

However, reviving a state-owned textile company will require an investment of US$6 billion, or around IDR 101.4 trillion (assuming an exchange rate of IDR 16,900 per dollar).

“This will later be prepared by Danantara,” said Rosan, referring to the Investment Management Agency (BPI Danantara).
Meanwhile, Danantara CEO Rosan Roeslani stated that the agency is open to various investments that support job creation, even if the potential returns are below average.

“We are open to accepting investments that may have lower returns than our parameters if they create more jobs. Textile, for example, is one sector that has very high employment potential,” Rosan explained after releasing 2025 investment realization data on Thursday.

Nonetheless, there are no details yet on the form of the new state-owned textile company. Airlangga emphasized that this plan involves establishing a new entity, not reviving an old, non-operational one.

Previously, Indonesia had state-owned enterprises in the textile industry, such as PT Industri Sandang Nusantara (Persero) and PT Primissima (Persero).

However, Industri Sandang Nusantara was declared bankrupt in 2024, while Primissima suffered years of losses and has been non-operational since 2020. (KR/LM)

Source: idnfinancial.com