Industry
From The Report: Indonesia 2017
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Historically, Indonesia’s industrial sector has long been content to target the low-hanging fruit of its sizeable captive domestic market for much of its output, while exporting primarily raw materials or low-value-added products abroad. But in line with the evolution of the country’s economy, a strategic shift has been accelerating over the past decade, which is aimed at diversifying the industrial manufacturing sector and deriving greater value from domestic resources, in addition to providing more and higher-quality jobs for the growing population.

This chapter contains interviews with Ryamizard Ryacudu, Minister of Defence; Rosan Roeslani, Chairman, Indonesian Chamber of Commerce and Industry; Lee Kang Hyun, President, Korean Chamber of Commerce; and Simon Linge, President-Director, Bluescope Steel Indonesia.

Articles from this Chapter

Overview

Scaling up: Government spending and deregulation aim to stimulate investment and diversification
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Historically, Indonesia’s industrial sector has long been content to target the low-hanging fruit of its sizeable captive domestic market for much of its output, while exporting primarily raw materials or low value-added products abroad. But in line with the evolution of the country’s economy, a strategic shift has been accelerating over the past decade, which is aimed at diversifying the industrial manufacturing sector and deriving greater value from domestic resources, in addition to providing…

Interview

Regional cooperation: OBG talks to Ryamizard Ryacudu, Minister of Defence
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Interview:Ryamizard Ryacudu How can Indonesia better protect its borders? RYAMIZARD RYACUDU: The first thing we have to do is strengthen our relationship with neighbouring countries: by having better relations with them, we are protecting our borders. The second priority is improving and updating our navy, army and air force. We have modernised our fleet with small and large ships. We have also reinforced our air force, and will continue these efforts in the future. We will not only continue…

Analysis

Emphasising investment: New regulations and more land allocated to industrial estates demonstrate the importance of industrial zones
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A crucial component of Indonesia’s ongoing industrial development is found in the 200-plus industrial zones spread across the country, hosting businesses in many sectors, from food and beverage manufacturing to aerospace. These zones provide a focal point for manufacturing investment, allowing businesses to integrate supply chains across industries and enabling the concentration of infrastructure needed for efficient production and access to markets. As a result, investors, suppliers and consumers…

Interview

Effective integration: OBG talks to Rosan Roeslani, Chairman, Indonesian Chamber of Commerce and Industry (KADIN)
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Interview:Rosan Roeslani What is needed to support local industry growth? ROSAN ROESLANI: Re-industrialisation is important to strengthen Indonesia’s competitiveness in the global market place, and we are focused on the dual objectives of broadening the manufacturing base and moving up the value chain. Many of the problems holding back Indonesia’s competitiveness in the manufacturing sector relate to financing, capacity building and market penetration, areas in which the government and…

Analysis

Growth driver: Sustained growth makes the food and beverages industry a priority for spending and investment
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The combination of Indonesia’s 250m-strong population and its robust agriculture and fisheries sector create an almost ideal operating environment for the food and beverage industry. These opportunities have not been lost on international or local companies, and the segment continues to attract some of the most significant investment of any industrial segment. The segment’s relevance for Indonesia is apparent, not only in its role of providing sustenance for the country’s growing population,…

Interview

Silver linings: OBG talks to Lee Kang Hyun, President, Korean Chamber of Commerce
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Interview:Lee Kang Hyun What challenges do you see in positioning products in South-east Asia’s largest market? LEE KANG HYUN: There are some gaps between Indonesia and the global market, as it differs from other niche markets. Before, Indonesia would associate high-quality electronics with Japanese brands and any other foreign brands would have a hard time penetrating the market. Today, local consumers are more aware and are highly influenced by information found online. The consumer has…

Analysis

Threading the needle: Securing trade deals and shifting offerings towards diverse and high-quality products are key to growth
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Indonesia has a rich tradition of textile production and a technical mastery of the industry. As business professionals in other countries across the region abandon traditional clothing in favour of Western-style business wear, many Indonesians today still primarily prefer to wear the unique, colourful patterned clothing style known as batik. Much has changed in the hundreds of years since the distinctive local style was first adopted, but one constant that has persevered is the significant role…

Interview

Steely determination: OBG talks to Simon Linge, President Director, Bluescope Steel Indonesia
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Interview:Simon Linge What is your view on the steel industry’s prospects for the next 12 months? SIMON LINGE: For the global steel industry, as for Indonesia’s, 2015 was a tough year. As China’s spending on infrastructure slowed, the oversupply of crude steel led to increased exports. This translated into a decline in pricing globally and excess supply in Indonesia. The volatility of the rupiah has also affected foreign direct investment and caused prudence in the local markets. The…