Capitalizing on the momentum of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), three integrated textile companies have officially commenced the construction of vertical manufacturing facilities (featuring a two-stage apparel production process) in Subang Smartpolitan, West Java.
The groundbreaking ceremony, held on 23 April 2026, was attended by government representatives from the Ministry of Investment and Downstream Industry (BKPM), the National Economic Council, the Ministry of Industry, the Ministry of Foreign Affairs, and the Embassy of Sweden for Indonesia, as well as local government officials from the Subang Regency. This milestone marks not only the beginning of physical construction but also the development of a modern textile production ecosystem encompassing all manufacturing stages within a single estate.
With a total estimated investment of USD 60 million and a potential workforce absorption of approximately 3,000 – 3,800 employees, this initiative comprises three integrated operational entities, PT Binkova Textiles Indonesia, focusing on fabric dyeing and finishing (Tier 2), PT Dafei Textile Indonesia, specializing in weaving and knitting, and PT Serendipity Fashion Indonesia, a garment manufacturer designated as Tier 1 within the textile and apparel industry.
This strategic move was taken in response to Indonesia’s competitive position as a premier investment destination for the textile and apparel sector. The three companies, which are business partners of the global fashion brand H&M, selected Subang Smartpolitan to establish a comprehensive vertical supply chain to fulfill the “two-stage process” requirements under the IEU-CEPA zero-percent tariff scheme. This is expected to significantly enhance the export competitiveness of Indonesian products in the European market.
Mr. Sun Jianjun, Direktur PT Binkova Textiles Indonesia stated “Our decision to build vertical manufacturing facilities in Indonesia is a strategic step to strengthen our position as a competitive global supplier. The company is committed to introducing modern manufacturing technology in Subang Smartpolitan to ensure operational efficiency and product traceability, aligning with international sustainability standards and global trade requirements.”
Construction is targeted for completion by the end of 2026, followed by the commencement of full production operations. All production facilities will subsequently produce various fashion products prioritized to meet global market demands, including those of our business partner, H&M.
Abednego Purnomo, Chief Commercial Officer of Subang Smartpolitan, welcomed the investment and emphasized the importance of industrial integration within the region. “We are very proud to be the home of this major investment. The entry of vertical manufacturing spanning Tier 1 to Tier 2 proves that the ecosystem at Subang Smartpolitan is capable of meeting investor needs for logistical cost efficiency and rigorous ESG standards. With strategic connectivity to the Cipali Toll Road and proximity to Patimban Seaport, we are confident that tenants can maximize global market opportunities.”
He further added that this investment would generate a multiplier effect for the local economy. “The presence of this industry will not only provide direct employment within the factories but also create three to four derivative jobs in supporting sectors, such as logistics providers, catering services, laundry, and other businesses surrounding the area.”
This sentiment was echoed by Mr. Saribua Siahaan, Director of Investment Promotion for ASEAN, Australia, New Zealand, and the Pacific at the Ministry of Investment (BKPM). “We have high hopes that this new investment in Subang, beyond the textile sector, will help drive the regional economy and support Indonesia’s target of 8 percent economic growth by 2029.”
Providing further support, Budiasti Wulansari, Environmental Sustainability & Public Affairs Lead at H&M Production Indonesia, stated “H&M has operated for over two decades in Indonesia and has built strong collaborations with dozens of manufacturing companies across Java. The presence of vertical facilities from PT Binkova, PT Serendipity, and PT Dafei in Subang is a testament to our commitment to continued growth with Indonesia. The integration of this two-stage process not only presents an opportunity for the Indonesian textile sector to increase its global competitiveness but also optimizes cost efficiency and ensures sustainability standards that align with global market trends.”
The selection of Subang Smartpolitan as the investment location was based on its integrated infrastructure, which supports logistical efficiency and strategic connectivity, making it an ideal hub for export-oriented manufacturing. This investment is expected to serve as an economic catalyst through significant job creation in the Subang region while increasing the value-added of the domestic textile industry and solidifying Indonesia’s position as a key player in the global fashion supply chain.