Zahid Nazir
Head - Sales PT Argo Manunggal Triasta
Speed & right-first-time concern to many mills
Headquartered in Indonesia, integrated textile company PT Agro Manunggal Triasta, manufactures high quality textiles from cotton and cotton-polyester or mix. Fibre2Fashion spoke to Zahid Nazir, GM - sales & marketing, PT Agro, to understand how the Indonesian textile industry is braving challenges like the US-China trade war, currency depreciation and the pandemic.
What is the company's size and scale?
We are an integrated textile and garment unit.
Production in piece dyed textile woven (cotton and poly/cotton) is 2 million yards/month.
Production in yarn dyed woven fabric (cotton and poly/cotton) is 500,000 yards/month.
Weaving capacity is about 3,500,000 yards/month.
Cotton bleaching is 800 tonnes/month.
Digital printing is 20,000 yards/month.
Garment production is 280,000 pieces/month.
Total work force is around 3000.
Our turnover is US$ 100,000,000/annum.
What are the national and international trends in yarns and readymade fabric? Can you name a few?
There is more demand for eco-friendly fabric. The demand ranges from recycled polyester, organic cottons, fair trade cotton and a number of sustainable fabric. Stretch fabric and light weight fabrics are also the favourite. We also feel that there will be more requirement for health friendly products like anti-bacterial, anti-fungus fabrics among others in future.
What are the challenges the Indonesian textile industry faces today? How is government coming in support of the industry?
Traditionally, Indonesian textile mills are used to mass production with repeated items. This has drastically changed due to market demand. Machineries are outdated causing low productivity. We are also hit with illegal imports of low priced fabric causing a price strain. A number of mills do not have proper waste water management. Finding skilled worker is a challenge in this field. R&D is one area that needs a lot of improvement. We need to be inventors rather than following the market demand. Speed and right-first-time are also a concern to many mills.
The government has imposed strict policies for illegal imports. Incentive plans for upgrading machines have also been provided. Continuous engagement between the government and textile mills for competitive energy prices, port fees, logistic cost and tax incentive has taken place. Banks are also lobbied to remove textile notion as a "sunset industry". This has been successful with some loans provided.
What are the major achievements of the company since its inception in 1991?
Our growth on an average has been 12-15 per cent per annum since establishment. We have continuously invested in the following in the last 10 years:
2005 High quality digital printing on natural and nylon qualities catering premium brands.
2006 Increased garment sewing lines to 9 lines of 50 machines and 16 lines pf 30 machines.
2018 Yarn dyeing capabilities with new 35 high speed AJL looms, sectional warper, automatic colour kitchen.
2020 Cotton bleaching fully automated process using latest contamination controlled machine and meeting European Pharmacopeia standard.
2020 ERP system like SAP.
What is your competitive advantage with respect to other textile companies in Indonesia?
Have a professional operational team with 25+ plus years experience in the field.
Provide fast and accurate response.
Provide one stop shopping from fabric to garment.
High quality products with reputation as market leader.
Lean and efficient team.
Modern factory with sophisticated waste water and recycle management.
Strong R&D team.
Cotton production in Indonesia is declining year after year. Is this having a serious impact on cotton yarn exports from Indonesia?
The local market in Indonesia is very large, compromising many fibre segment. Lately rayon and poly/rayon are in demand due to hand feel advantage and increased uniform business. Cotton is still a favourite for shirting and casual bottoms. A number of cotton spinners have reduced capacity due to high cotton prices in a stressed market. To compensate they switch to spun polyester or rayon/viscose which have less price volatility.
What impact has the US-China trade war and the currency depreciation had on Indonesian textile business?
A number of well-known brands have indicated their desire to relocate production to Indonesia. The challenge has also been the price. The biggest advantage for Indonesia is that we have a large vertical setup from spinning, weaving, processing all the way to garment making. The US-China trade war has not directly benefited Indonesia in the short term, but I believe in the long run, Indonesian mills will be more competitive and can enjoy a surge in sales. The competition will be from neighbouring Cambodia or Bangladesh. The impact of currency depreciation is not that significant as a number of chemicals/raw material or fibres are imported with US dollar rate.
Which are your major markets for yarns and fabrics? Which brands & retailers are you currently associated with?
We plan to work closely with garment companies in Indonesia/far east regions allowing quick turnover. US and Japan are our strong export markets. We work with a number of international brands in uniform and fashion niche.
What new technologies do you plan to invest in?
Recycle waste water technology, caustic recovery, and dyeing/processing latest innovation.
How is the textile industry impacted with the current onslaught of Coronavirus? What measures is the industry taking?
The coronavirus pandemic has been a game changer to many industries. In Indonesian textile industry, we see a big drop in demand in both domestic market and exports. Retail sales were hit hard impacting deliveries of ready-made products. However, the mills have been resilient in adapting to changes. Many started to convert production to health related products including masks, medical gowns, hospital wear etc.
Factories are trying to streamline their work force, work more efficiently, focusing on products' strengths rather than follow the market demand. It is also a good time to streamline the supply base.
What is the sourcing strategy at PT AMT?
We have a consolidated sourcing team enjoying economies of scale. We work with few but reliable suppliers of chemical/ink/fabric mills that meet international standards. Our aim is to have as much domestic suppliers as possible. We coordinate with all suppliers to have an open discussion regarding market demand and tackle problems together.
How does your supply chain network work? What regions of the world are part of your supply chain?
We source yarns and greige fabric from south Asia and China. Most chemicals or inks are Europe based. Most of our machinery is of European origin. We work with few lean suppliers emphasising on high service, quality and competitive price.
Which manufacturing trend is going to drive the way you do business in the next 2-3 years?
Anything related to health benefit products will be a key factor to success. Eco-friendly products will be trend setter. Consumers will demand more vibrant and bold colours. Quick turnover will be a game changer.
What are the short and long-term sustainability goals set at PT Agro Pantes?
We strive for eco-friendly manufacturing that includes low water consumption, minimal energy and less chemical usage. These are ongoing steps which we continue to invest in long term. We have set standard operating procedure for proper right-first-time production. (PC)
Published on: 05/05/2021
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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