Nisshinbo Textile Inc. has decided to dissolve the joint-venture business of P.T. Malakasari Nisshinbo Denim Industry (MNDI), which manufactures denim in Indonesia.
The company is holding clerical negotiations with joint-venture partners to withdraw its capital. With the termination of this joint-venture business, it will withdraw from denim production in Indonesia.
Nisshinbo Textile manufactures denim in Japan and Indonesia. In recent years, a major customer has changed its denim procurement strategy with a switchover to global procurements, leading to a decline in Indonesia’s production advantages. Nisshinbo Textile initially had plans to transfer a part of its production from Japan and increase production in Indonesia.
However, there were differences in opinions with joint-venture partners in regard to production planning after the production increase and methods of quality assurance. With the continuous shrinking of the market for premium jeans, a specialty of Nisshinbo Textile, it was considered difficult to produce denim at MNDI for Japan, and a decision was made to dissolve the joint venture in February this year.
MNDI has a complete line of denim manufacturing equipment including rope dyeing machines at its factory in Bandung, West Java. The production capacity was 500,000 sqm/month as of October 2018.