The textile industry is continuously under pressure, how are you staying ahead, with new technology?

Since 2014 I have been investing 40-60% of my profits in new technology and software for planning and production control so we have an edge over other companies and remain competitive. At the end of the day the cost is more but the accuracy, speed and quality achieved is also so much better, allowing us to penetrate quality markets. We are invested in software for planning tools, fast react and ERP (Enterprise Resource System). We are engaged in ultrasonic cutting, ultrasonic forming, laser cutting and laser application. Over the last four years, we have built the capacity of scanners, lasers and 3D software: It has been a major investment, but allows us to stay ahead of the market.

Do you also produce for the local market?

A local retail chain is in discussions with us to develop a quality brand to compete with Jockey, La Senza and other international brands. They were unable to find such quality products domestically, which is why we are now partnering with them, hoping to launch the brand in April 2018.

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What numbers are you expecting to produce?

We are expecting a retail business of around IDR 220 billion within 5 years. Our first delivery will be IDR 3 – 4 billion in retail market value, which should be sold within in 2 or 3 months. Obviously, we hope the development will be positive in order to finally also enter the local market.

Who is taking care of the design?

In Yogyakarta we have 150 people engaged in product design and development research. There we only have one expat and a contract designer from the UK who comes every three months to guide us regards the international market and European requirements. We also invite manufacturers from China to select new materials which we convert into garments with specific style requirements and shape processes.

Do you have issues with the supply chain, can you source all your material here in Indonesia?

Our business demands what you could consider very high-tech materials. They are not common materials and only a few mills in China make them. We have to import almost all material from China, the foam is supplied by a local Japanese company here and we are now utilizing 55% local products and importing about 45%. Out of those 45%, we’re looking to source another 7% domestically.

Previously the clothing industry in general has suffered under the demand that everything needs to be “cheap”. Is this rule not slowly changing due to consumers becoming more aware and more willing to pay higher prices?

This industry is still based on cents; only the sales are based upon dollars. The world market was spoiled by China after 2000, where they continuously reduced prices. Through this tactic they became the leaders and though China is finally not reducing prices anymore, retailers are still looking for lower prices, which is why they are looking at Bangladesh. The pricing is cheaper than Indonesia where we produce upmarket garments. We moved to Bangladesh in order to be able to reduce prices and we see this trend continuing.

From a macroeconomic perspective, how do you see the current development in Indonesia?

Indonesia became stagnant over 10 years and changes were more structural than real. The current government is taking on a task of accelerated development in multiple areas, such as transparency, human rights and with a strong focus on infrastructure development. Within the economic field we can say that there is a push to make things more transparent and to urge people to do business. With this development continuing for another five to ten years, Indonesia will be a different country.