A number of countries are starting show interest in investing in the Indonesian food and beverage industry. Foreign investment in this industry increased by 30% to IDR 90 trillion in 2022.
There are several countries such as India, Saudi Arabia, America, and China who are interested in making investments in Indonesia, which will encourage higher industrial growth.
Adhi Lukman, Chairman of the Food and Beverage Entrepreneurs Association (GAPMMI) said that foreign investors were interested in entering Indonesia because it has growth prospects and potential.
“I was contacted by several potential investors from other sectors, (but) not from food and beverage. They want to enter the food and beverage industry,” said Adhi, on July 18, 2023.
Investment turmoil in the food and beverage industry
In 2019-2021, the domestic food and beverage industry had consistently declined. Foreign investment in the food and beverage industry also shrank by 20% in Q1 2022 on an annual basis to US$ 1.2 billion with total foreign investment reaching US$ 2.3 billion.
The domestic investment in this industry increased in Q1 2022 which grew to IDR 24 trillion, this figure is close to the Q1 realization of IDR 26.5 trillion.
Meanwhile, on an annual basis foreign investment had only reached IDR 70 trillion in 2021, this figure will increase significantly in 2022 to IDR 90 trillion.
Currently, the food and beverage industry plays an important role in sustaining Indonesia’s economic growth, with a contribution to the Q1 2023 Gross Domestic Product (GDP) of 38.61% compared to the non-oil and gas sector which is in a position of 6.47%.
“The food and beverage industry is also starting to revive after being hit by the Covid-19 pandemic,” said Putu Juli Ardika, Director General (Dirjen) of the Agro Industry at the Ministry of Industry (Kemenperin).
Meanwhile, the growth of this industry in Q1 2023 reached 5.33% compared to the same period in 2022 of 3.75%.
On the other hand, the Industry Confidence Index (IKI) from the Ministry of Industry explained, this industry is a sub-sector that is consistently at the level of expansion, reflecting the high level of confidence from industry players in Indonesia.
Promoting products internationally
The Ministry of Industry continues to take active steps to facilitate the promotion of food and beverage industry products through various international exhibitions, such as the Industrial Exhibition Plaza which was attended by 60 food and beverage industry companies.
Meanwhile, at the G20 Indonesia event in 2022 it also took the momentum to introduce national industrial products such as food and beverages to expand exports.
On the other hand, international trade routes such as the ASEAN Economic Community (AEC) are increasingly opening up trade in the ASEAN region, providing greater export opportunities to Indonesia’s neighbors.
As a very significant market, Indonesia is an attractive investment base for supplying to local customers and neighboring countries.
Meanwhile, the market potential is still not limited. As personal income increases, and the spread of modern retail continues to increase access to remote areas.
In addition, big cities such as Makassar, Medan and Manado have developed into growth centers with high sales and consumption.
Opportunities are also abundant for investors who are providers of machines that can help manufacturers increase the quality and quantity of production.
