Sector
Industry
Indonesia's industrial sector encompasses diverse subsectors that play a significant role in the country’s gross domestic product (GDP). Notably, manufacturing contributed 16.30 percent of Indonesia’s total GDP in the second quarter of 2023, with key activities including the manufacturing of textiles, automotive, electronics, and food processing. During the same period, other subsectors also experienced growth, led by the metal, computer, electronic devices, optical, and electronic appliances industry, which grew by 17.32 percent. This was followed by growth in the basic metal industry by 11.49 percent, the transportation industry by 9.66 percent, the food and beverage (F&B) industry by 4.62 percent, and the paper and recording media industry by 4.50 percent.
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Industry
Indonesia's industrial sector encompasses diverse subsectors that play a significant role in the country’s gross domestic product (GDP). Notably, manufacturing contributed 16.30 percent of Indonesia’s total GDP in the second quarter of 2023, with key activities including the manufacturing of textiles, automotive, electronics, and food processing. During the same period, other subsectors also experienced growth, led by the metal, computer, electronic devices, optical, and electronic appliances industry, which grew by 17.32 percent. This was followed by growth in the basic metal industry by 11.49 percent, the transportation industry by 9.66 percent, the food and beverage (F&B) industry by 4.62 percent, and the paper and recording media industry by 4.50 percent.
Notably, the F&B industry stands out as the only non-mineral industry to have made the largest contribution to the national GDP at 38.61 percent in the first quarter of 2023, having generated US$1.1 billion from 2,226 projects through foreign direct investment (FDI) and Rp 26.72 trillion from 5,416 projects through domestic investment sources.
Indonesia’s massive industrial development has enabled the industrial sector to provide extensive employment opportunities, with over 19 million people employed in the sector, making it the largest workforce in Indonesia as of 2019. By 2024, the government aims to further increase employment in the sector to more than 20 million people.
Among all the subsectors, the non-oil and gas manufacturing industry has emerged as one of the most important in terms of employment, providing work opportunities for approximately 14.13 percent of the Indonesian labor force in 2022. Companies within this subsector are mostly concentrated on the island of Java. Additionally, the Riau Islands are known to have the highest average net wage for manufacturing workers in the country, with around Rp 5.55 million per month as of February 2023.
Furthermore, Indonesia's industrial sector presents promising opportunities for growth and development across various fronts, including Industry 4.0 transformation, adoption of sustainable practices, regional integration with Southeast Asia and Pacific actors, downstream manufacturing, and empowerment of small and medium enterprises (SMEs). Particularly concerning Industry 4.0 transformation, the government administers the integration of advanced technologies into the production process to improve efficiency and product quality. Additionally, efforts are underway to reduce production costs by placing cement, refined petroleum, automotive, and F&B at the forefront of entering Industry 4.0.
Moreover, the incoming administration has promised to bolster the downstream agenda, especially in the mining sector, with plans for 20 new smelters set to become operational between 2024 and 2025. The shift towards downstream mining products, such as bauxite, copper, and tin has the potential to increase their value, with added values reaching up to three to 180 times along the value chain.
Latest News
The Banten Province Investment and One-Stop Integrated Services Office (DPMPTSP) and Bank Indonesia Representative Office for Banten Province held the "Banten Investment Forum 2024" event in the Gading Serpong area of Tangerang on Oct. 29, 2024.
The event, which had "Investment To Enhance Inclusive and Sustainable Economic Growth" as its theme, was opened by Investment and Downstream Ministry/Investment Coordinating Board (BKPM) Investment Promotion Deputy Nurul Ichwan. Also attending were BI Banten Head Ameriza Ma'ruf Moesa, Banten DPMPTSP Head Virgojanti, heads of local administrations in Banten Province, business actors and banks, as well as students and other related elements.
Banten DPMPTSP Head Virgojanti said that the event was expected to be a forum that brought business actors, prospective investors, banks, as well as local governments and the community together. The Banten DPMPTSP also wants to get input related to investment opportunities that can be done in Banten Province from observers and economic actors through the forum.
"Or maybe there are things that need to be recommended in order to improve the investment services provided by ourselves as part of the Banten Provincial Government," she added.
The forum's talk shows on investment opportunities and future economic challenges include Bank Permata (PermataBank) Chief Economist Joshua Pardede, BI Banten Head Ameriza Ma'ruf Moesa, and other speakers from the National Development Planning Agency (Bappenas), the Energy and Mineral Resources Ministry, BI, and PLN's Banten Province Central Distribution Unit.
An award ceremony was also held as a form of appreciation for the performance of the Banten's regency and city governments that have jointly encouraged growth and ease of investment in Banten Province.
"Investment realization will not be achieved without our cooperation and collaboration," Virgojanti said.
Appreciation was also given to business actors that has performed well on matters such as providing reports on the implementation of business partnerships.
"Today, we are also launching an investment brand in Banten, namely 'Banten Gold'," Virgojanti revealed.
She said that the Banten Gold brand was created based on various inputs from several groups for a strong identity to attract investments that is also not "narcissistic."
In addition, there was also a presentation for development and investment opportunities in the Tanjung Lesung Special Economic Zone (KEK), the Pantai Indah Kapuk National Strategic Project (PSN), and Bumi Serpong Damai (BSD).
The handover of business registration numbers (NIB) to MSMEs was also carried out at the forum, as well as meetings and in-depth discussions for investors. The forum also saw the signing of memorandums of understandings (MoU) for business partnerships between large entrepreneurs and several MSMEs in Banten.
Virgoyanti also conveyed the written statement of Acting Banten Governor Al Muktabar, who emphasized the importance of investment in efforts to develop Banten's economy, raise employment, improve community welfare, and eradicate poverty.
"We express our gratitude and appreciation to investors and prospective investors for choosing Banten Province as a place to invest and develop their businesses, which of course in turn will provide a positive contribution that becomes a very important factor in regional development," he stated.
Al Muktabar hoped that synergy will be built between the central government, local governments, business actors or investors, and the community through the forum so a conducive investment climate could be achieved in Banten.
"So that it (the synergy) could encourage the creation of quality investment that can play a role in reducing poverty, raise the [local] economic growth rate, and significantly increase employment," said Al Muktabar.
Meanwhile, Investment and Downstream Ministry/Investment Coordinating Board (BKPM) Investment Promotion Deputy Nurul Ichwan emphasized that all investment stakeholders must follow the new norms established by the United Nations' Sustainable Development Goals (SDG), which for business actors is expressed as environmental, social, and governance principles.
"We cannot exclude ourselves from following those norms," he stated.
