Jl. Gatot Subroto No. 44Jakarta 12190, PO. Box 3186Indonesia.

p. +6221 5292 1334 f. +6221 5264 211www.bkpm.go.id e. :info@bkpm.go.id www.bkpm.go.id

Bali Island

1.73%Banten

5.28%

East java

12.69%Jakarta

13.14%

Central Java

23.05%

West Java

39.82%

DIY Yogyakarta

1.51%

South Sulawesi

0.53%

North Sumatera

0.53%

Riau Island

0.37%

Lampung

0.24%West Sumatera

0.28%

Others(13 Provinces)

0.83%

Location Indication:Sumatera, Java, and SulawesiIndustrial CentresAceh(6), North Sumatera (84), West Sumatera (44), Riau (15), Jambi (9), Bengkulu (9), South Sumatera (18), Lampung (31), West java (129), Central Java (185), Yogyakarta (39), East Java (9), Bali (161), West Nusa tenggara (88), East Nusa Tenggara (76), West Kalimantan (17), Central kalimantan (24), East kalimantan (27), Sout Sulawesi (78), Southeast Sulawesi (14), North Sulawesi (14), Maluku (24), Papua (9).

The Total of Centre 1.308Companies

Source: Ministry of Trade, 2014

LabourTextile Industry is one of the biggest worker absorber in Indonesia. Approximately, over 800,000 workers have been working in apparel and other related textile industry in 2013.

Indonesia Invetsment One Stop Service (OSS) Centerand Marketing OfficerIndonesian President, Joko Widodo, officially launched the Integrated One Stop Service Centre (PTSP) at Indonesia Investment Coordinating Board (BKPM) in early January 2015. This service aims to smoothen and simplify licensing procedures for investment projects. From now on, investors will not need to visit various ministries or government agencies to obtain necessary permits but can simply turn to the BKPM's OOS centre.In addition, currently the BKPM has established what so called Marketing Officers (MO) who will take care any investment interest to explore investment opportunities in the country. The contact of MO is Directorate of Sector Promotion, BKPM (Phone: [62-21] 525-2008 Ext: 3568, Fax: [62-21] 5288-0390).

Local PartnerA host of organizations supporting Indonesia’s labour-intensive sectors are growing in prominence, as are academic centres of excellence.

INVESTMENT

TEXTILE

Aceh(6)

North Sumatera (84)

West Sumatera (44)

Riau (15)

Jambi (9)

Bengkulu (9)

South Sumatera

(18)

Lampung (31)

West java (129)

Central Java (185)

Yogyakarta (39)

East Java (9)

North Sulawesi (14)

Maluku (24)

Papua (9)

Source: Ministry of Trade, 2014

West kalimantan (17)

East kalimantan (27)Central

Kalimantan (24)

South Sulawesi (78) South East Sulawesi (14)

www.bkpm.go.id

Source: Government Regulation of The Republic of Indonesia No. 52 of 2011 Concerning Tax Facility

MARKET OPPORTUNITIESŸ The tex�le Industry offers both challenges and opportuni�es as

the Indonesian government an�cipates the sector to be a major engine of growth towards 2030.

Ÿ The tex�le industry is one of Indonesia's oldest and most strategically significant industries. It employs an es�mated 11% of the total industrial labour force or 1.34 million people in 2,853 companies and accounted for 8.9% of total exports in 2010.

Ÿ Low labour costs, poli�cal stability, availability of raw materials and cheap industrial land are a�rac�ng investors who are seeking alterna�ves to China's rising wages: the average tex�le worker wage in China has risen to $247 USD a month, in comparison to $140 in Indonesia.

Ÿ Indonesia Tex�le Associa�on (API) claimed 80% clothes global branded products have been made in the country. It basically shows that Indonesia tex�le industry has been renown globally by the world. Nowadays, there are growing number of tex�le and clothing companies established being around in the country. Half of them are export oriented ones.

Ÿ Tex�le factories, which are mainly located in Bandung, Bekasi, and Bogor, became an expensive brand suppliers like Hugo Boss, Giorgio Armani, Guess, Mark and Spencer, Mango and many other famous brands. Their export products have been reaching the markets of advanced economies like the Japan, UK, US, and other high-end markets.

Ÿ Indonesia has been becoming an industrial base for joint venture foreign companies producing specialized tex�le products like geotex�le; army uniform, which has been exported to around 30 countries, one of them is for North Atlan�c Treaty Organiza�on (NATO) soldier; and An�-Nuclear uniform, which has been exported to Saudi Arabia and Malaysia.

Investment in Tex�le Sector Indonesia tex�le investment realiza�on as seen on the graphics below reached US$ 422,489.1 million in 2014.

Ÿ Investment realiza�on of tex�le industry sub-sector in 2013 reached IDR 9,53 trillion or grew 9.4% from the previous year with the total investment is IDR 8,71 trillion.

Ÿ Cummula�vely in the period of 2009 – Tw3 of 2014: DDI increased 33,6% (IDR 11,8 trillion) and FDI increased 36,4% (IDR 23,2 trillion).

Ÿ Business Fields are dominated by the investment in Manufacturing and spinning of tex�le fibers (47%), Apparel Industry (47%), Industrial Finishing of tex�les (12.5%), Tex�le Weaving Industry (12%), and the rest of other business sectors.

Top-10 Tex�le and Garment Exporter Countries in 2009 - 2013

GOVERNMENT PROVISIONS AND SUPPORTSThe government of Indonesia has considered tax industry as one of priority sectors, therefore, it has commi�ed to develop tax facili�es to maintain and strengthening the industry. Various incen�ves in order to a�ract more tex�le industry investment have been issued by the government of Indonesia, such as:1. Supports industry-wide revitaliza�on by providing financial

incen�ves to persuade tex�le and clothing businesses to invest in new machinery. It also promotes technological coopera�on between local and foreign companies and the transfer of knowhow.

2. Bear the import duty of capital goods and material to produce carpet and/ or rug.

3. Tax Allowance: The reduc�on of corporate taxable income as much as 30% of investment value is granted for certain business fields and/or certain areas for all tex�les downstream industries. This tax allowance is spread for 6 years, meaning 5% each year.

By Sector:

ndonesia -as an emerging global powerhouse in Asia, with a IGDP expected to reach US$ 1 trillion in 2014- is the largest economy in Southeast Asia. Much less affected by the global financial crisis compared to its neighboring countries, Indonesia's economy grew around 5.5% in 2013, making it “The World's Most Stable Economy in the Past Five Years” according to The Economist magazine.

In line with the growing economy, investment in the tex�le industry in Indonesia has also increased. Being one of the world's leading tex�le producers, Indonesia leverages on the strong upstream and downstream tex�le industries, which both are well developed in Indonesia. The ver�cal integra�on as a result of this, from the raw material to finishing, creates highly streamlined supply chains and provides a one-stop solu�on for interna�onal buyers and sources.The tex�le industry plays an important role in the manufacturing sector and has gained recogni�on in the global market. With strong government support, rising domes�c disposable income, and the growing demand for tex�le and tex�le products, Indonesia offers great opportuni�es for investment in the tex�le industry.

WHY INDONESIA?

Indonesia has great poten�als in developing its tex�le Industry, as one of the prominent tex�le manufacturing countries. One of the strong points of the industry is the well-developed upstream and downstream business, which allows for �ght ver�cal integra�on. Seeking to take advantage of this, major local garment makers have raised capital to acquire assets that would help them streamline their supply chains. Meanwhile, Indonesia has successfully posi�oned itself as an alterna�ve produc�on market for global fashion brands.

The government has set its sights on increasing the value of exported tex�les and garments to US$75 billion by 2030 and contribu�ng 5% to global exports, up from less than 2% at present. At the same �me, the country is moving up the value chain in garment produc�on, with higher-value products such as suits and trousers registering faster growth than the lower value items, such as t-shirts. As an investment des�na�on for tex�le producers, Indonesia holds a number of significant advantages.

TEXTILEINVESTMENT

The investment of na�onal tex�le industry is dominated by apparel industry