Province

South Sumatra

Overview Economy

South Sumatra, the province divided by Musi river

Sumatra Island’s eastern coast is home to South Sumatra, a province of 8.89 million people as of 2023. The province’s capital city is Palembang, a city that serves as a blend of modernity and tradition, thereby contributing to South Sumatra’s presence as a cultural melting pot where traditions and customs rooted in Java, Palembang, and Malay culture exert a significant influence. Additionally, the province’s local cuisine reflects this diversity, featuring spicy and savory meals as staples.

Furthermore, a highlight of South Sumatra's cultural legacy is the annual Sriwijaya Festival, which honors the historical Sriwijaya Kingdom that once flourished in the area. The festival showcases the province’s rich cultural diversity through traditional performances, art exhibitions, and gastronomic events.

With a varied terrain that includes mountains, forests, and plains, South Sumatra’s natural landscape notably is cut by numerous rivers, among them the Musi River, which plays an essential role in the region’s agricultural and transportation networks. Particularly, the Ampera Bridge spans the Musi River, further contributing to the region’s connectivity and infrastructure.

Moreover, South Sumatra’s vast landscape supports a wide variety of plants and animals. These include the critically endangered Sumatran tiger and rhinoceros, housed in the UNESCO World Heritage site of Bukit Barisan Selatan National along with a variety of other animals.

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Economic landscape

South Sumatra’s economy, as of 2023, is reflected in a Gross Regional Domestic Product (GRDP) of Rp 360 trillion. Driving this GRDP are several sectors, with the mining sector leading with a contribution of 26.61 percent, followed by the processing industry sector, and the agriculture, forestry, and fishery sector.

Moreover, the province contributes significantly to the country's palm oil industry due to its vast plantations. Additionally, natural resources such as coal and rubber contribute significantly to both the national and local economies.

In 2023, South Sumatra province attracted Rp 36.80 trillion in investment up to the third quarter of the year. During this period, both domestic and foreign investments were nearly identical, with Rp 18.67 trillion and Rp 18.12 trillion, respectively. Among international sources of investment, Singaporean businesses led the way with Rp 12.19 trillion, followed by China at Rp 2.63 trillion, Hongkong at Rp 1.67 trillion, Japan at Rp 665 billion, and Malaysia at Rp 319 billion.

Five major sectors enjoyed investment in South Sumatra during that period, namely the paper and printing industry with Rp 10.81 trillion in investments, the mining industry at Rp 5.61 trillion, the energy industry at Rp 4.67 trillion, the food industry at Rp 3.43 trillion, and the transportation, warehousing, and telecommunication industry at Rp 3.04 trillion.

To sustain the flow of investment into the province, South Sumatra is supported by the Trans-Sumatra Highway, connecting the province to Lampung. Notably, the Palembang-Lampung route reduces travel time from 10-12 hours to only 3.5 hours. Significant investments have been made in this highway, including the Indralaya-Pramubulih route, which received an investment of Rp 12.5 trillion.

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Latest News

December 9, 2025

Banyuasin Regional Secretary Erwin Ibrahim led discussions on the follow-up to the construction of a crude coconut oil (CCO) factory. A Japanese investor plan to use coconuts as a raw material for aviation turbine (avtur) biofuel or bioavtur, with an investment value reaching hundreds of billions of Rupiah.

"The investment value of this CCO factory is Rp 600 billion, with thousands of workers expected to be employed. We also discussed the factory construction targets, operations, and the factory's daily coconut needs," said Erwin on Nov. 13, 2025.

The employment target was conveyed by Tanaka, the investor for the project, who also divulged the year that the factory is planned to start operating.

"From the discussion, the factory is targeted to begin operations in February 2027, and the investor stated that it will require 1,000 workers in the initial phase," he explained.

The Banyuasin Regency Government welcomed the proposed investment. Besides creating a significant number of jobs, its development will also improve local infrastructure and economic growth.

"This also includes the infrastructure that will be built for access [to the factory] and the opportunities for economic growth in Banyuasin and South Sumatra [in general]," said Erwin.

"The Banyuasin Regency Government welcomes the Japanese investor. We hope this will open up opportunities for Banyuasin's young people to work and pursue careers in coconut processing," he continued.

Erwin added that the factory's initial daily coconut demand is quite large.

"The initial daily coconut demand is 500 tons, which will later be converted into CCO, the raw material for [bio]avtur," he said.

Also present at the discussion were the Banyuasin Plantation and Livestock Office Head Roni Utama, Investment and Integrated Services Office (DPMPTSP) Service Head Rayan Nurdinsyah, community leaders, village heads, and other relevant parties.

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