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 East Java Province trade and investment mission in Balikpapan City, East Kalimantan Province successfully recorded a total transaction value of Rp1.05 trillion. East Java Governor Khofifah Indar Parawansa said that the figure was the highest so far this year among East Java's trade and investment missions, and confirmed the province's position as a driving force for the national economy amid global pressure.
"This achievement is real proof that collaboration between provinces is able to strengthen the independence of the domestic market. This is a concrete form of cooperation between regions that trust and support each other. East Java continues to be committed to maintaining economic stability and expanding the national trade network," she state in an official statement on May 13, 2025.
The trade and investment mission was held at the Gran Senyiur Hotel Balikpapan on May 8, 2025, was attended by Khofifah, East Kalimantan Deputy Governor Seno Aji, and PT Bank Pembangunan Daerah Jawa Timur Tbk (Bank Jatim) President Director Busrul Iman.
The types of products traded during the event were very diverse, ranging from coal, fish feed, food and beverages, fashion, fishery products, to restaurant raw materials. Meanwhile, the largest investment was recorded in the crude palm oil (CPO) and wood pallet sectors. Several leading products from East Java that were also exhibited included tuna floss, spices, processed crab, garments, and processed beef.
Khofifah said that the East Java-East Kalimantan trade mission has a high strategic value. In 2023, total trade between the two provinces reached Rp23.25 trillion, with East Java importing Rp18.89 trillion from and exporting Rp4.36 trillion to East Kalimantan.
"We are ready to become the new gateway to the archipelago, and give our full support to East Kalimantan as a candidate for [hosting] the nation's capital," he said.
In response, Seno gave his appreciation and expressed optimism for the cooperation. He hopes that East Java business actors will be willing to develop more industrial downstreaming in East Kalimantan. Most importantly, Seno also hopes that the trade mission can bring great benefits to business actors and the two regions as a whole.
"East Java is the gateway to the archipelago and East Kalimantan hosts the future capital city. This synergy will accelerate the growth of Kalimantan," he said.
Meanwhile, Bank Jatim President Director Busrul Iman emphasized that the bank continues to fully support the East Java Provincial Government's programs. One such program is the strengthening of domestic trade connections through trade and investment missions, which was supported by Bank Jatim through involving several MSMEs fostered by the East Java Provincial Government-owned bank with East Java's trade mission in Balikpapan City.
He explained that the trade mission is a forum to bring together MSME actors between regions or provinces with buyers. In addition to being a venue for business actors to meet, the event is also a gateway for socio-cultural exchange between regions.
"We are currently continuing to strive to help overcome the problems faced by MSMEs, ranging from marketing access, financing, to mentoring. Bank Jatim strongly supports MSMEs in developing their businesses. One of Bank Jatim's missions in this activity (the East Java trade mission in Balikpapan City) is to help the MSMEs it fosters to expand their market networks and support the government in strengthening trade ties between the provinces of East Java and East Kalimantan," Busrul explained.
There were three MSMEs fostered by Bank Jatim that participated in the event, with Toko Kue Obby presenting apple nastar (bite-sized Southeast Asian tarts), Renjana showcasing its flavored cashew products, and Batik Puspita exhibiting its batik.
"As a regional bank, we will continue to support MSMEs so that they could accelerate their growth with good quality [products] so they can compete in the national and international markets," Busrul said.
In addition, Bank Jatim also presented the Batik Wastra Performing Arts by Batik Puspita, featuring East Java's Raka-Raki or tourism ambassadors modeling Sekartaji pattern batik.
"This wastra batik performance is a way for Bank Jatim to preserve and excite the community, especially the younger generation, in terms of loving their ancestral heritage. Hopefully, the number of people interested in batik will increase in the future, and Indonesian batik can be better known on the global stage," he said.
