Indonesia has all the makings of an industrial powerhouse: a young and talented population, relatively cheap labour and a large domestic market. The country has the capacity to develop its industrial capacity, specifically in terms of export-oriented industries. Indeed, manufacturing is vital to the Indonesian economy. Without it the country would have a difficult time addressing its current account deficit, escaping the middle-income trap and taking the edge off the commodity cycle. Indonesia must look for advantageous terms in foreign trade agreements and ensure that it is able to remain competitive in terms of import and export trade balance. Though national and presidential elections in April and July 2014, respectively, may bring some uncertainty for investors, on the whole most indicators point to a year of expansion for the economy. The challenge for the sector at this point is to make sure that a lack of infrastructure and demands for increased wages do not derail the return and rise of Indonesian manufacturing.
This chapter contains interviews with Irvan K Hakim, President Director and CEO, Krakatau Steel (Persero); Klaus Lesker, Member of the Executive Board, Ferrostaal; Hiroyuki Fukui, President Commissioner, Toyota Motor Manufacturing Indonesia; and VP Sharma, CEO, Mitra Adiperkasa.