Tuesday, October 15, 2024

Manufacturing investment during Jokowi president reaches Rp3.031 trillion

Reading Time: 2 minutes
Audina Nur

Journalist

Editor

Interview

The Ministry of Industry has revealed that the realization of investment in the manufacturing sector over the past decade, from 2014 to 2023 under the leadership of President Joko “Jokowi” Widodo, has reached Rp3,031.85 trillion (US$193.9 billion).

Minister of Industry Agus Gumiwang Kartasasmita says that investment trend has fluctuated during the 2014-2023 period. However, there was a surge in investment, from Rp186.79 trillion in 2014 to Rp565.25 trillion in 2023.

“The realization of investment in the non-oil and gas processing industry tends to fluctuate with an increasing trend. This means that investors still see Indonesia as a very attractive and profitable location for their businesses,” Agus said as quoted on Thursday, February 15, 2024.

Despite the pandemic, the manufacturing industry experienced significant investment growth from 2019 to 2023. In detail, investment in the manufacturing sector was Rp213.44 trillion in 2019, rose to Rp259.28 trillion in 2020, further increased to Rp307.58 trillion in 2022, and skyrocketed to Rp457.60 trillion in 2023.

In terms of growth, the most notable increases during the period of 2014-2023 were from 2021 to 2023, reaching 48.77percent. This was followed by growth from 2015 to 2016 at 39.18 percenrt, and from 2014 to 2015 at 24.22 percent.

Agus emphasized that the increase in investment in the manufacturing sector correlates with the government’s policy to drive downstreaming of natural resources, especially in the mining sector. “This means that the government is very consistent that investment realization is not only driven by the service sector, but also because of the prospects of building downstream industries to deepen our manufacturing structure to be more competitive,” he said.

Therefore, the government is committed to continue promoting industrial downstreaming, which will significantly contribute to national revenue through export taxes, royalties, non-tax state revenues (PNBP), and dividends. This is in line with President Jokowi’s direction, who stated that industrial downstreaming is the number one priority. “As an illustration, when we still exported nickel ore, the contribution of nickel commodities was around Rp15 trillion per year. After industrialization, its value jumped sharply to US$20.9 billion or equivalent to Rp360 trillion,” he explained.

Moreover, the increased realization of investment in the manufacturing sector has had a wide-ranging impact on the national economy, including an increase in the number of workers. From 2014 to 2023, the number of workers in the non-oil and gas processing industry tended to increase year by year. In 2014, the number of workers in the manufacturing sector was 15.62 million people, which increased to 19.29 million people in August 2023. Although the number of workers decreased in 2020 due to the pandemic, the industry’s performance rebounded after the pandemic and continued to grow every year, resulting in an increase in the number of jobs.

Audina Nur

Journalist

 

Editor

 

Interview

SUBSCRIBE NOW
We will provide you with an invoice for your reimbursable expenses.

Free

New to Indonesian market? Read our free articles before subscribing to the premium plan. If you already run your business in Indonesia, make sure to subscribe to the premium subscription so you won’t miss any intelligence & business opportunities.

Premium

$550 USD/Year

or

$45 USD/Month

Cancelation: you can cancel your subscription at any time, by sending us an email inquiry@ibp-media.com

Add keywords to your market watch and receive notification:
No topics
Schedule a free consultation with us:

We’ll contact you for confirmation.

FURTHER READING

State energy company PT Pertamina has set up partnership with two Japanese energy companies, JOGMEC and JAPEX, to develop Carbon Capture, Utilization, and Storage (CCUS) technology to contribute for the achievement of Indonesia’s net zero emission target.
PT PLN (Persero) and PT PLN Energi Primer Indonesia (PLN EPI) have signed a memorandum of understanding (MoU) to utilize company-owned land for the construction of gas infrastructure.
PT Pertamina Cepu, a subsidiary of upstream oil and gas company PT Pertamina Hulu Energi (PHE), discovered gas potential in the Tedong (TDG)-001 well located in North Morowali, Central Sulawesi. With a gas content of 15 million cubic feet per day (MMSCFD), and 185 barrels of condensate per day (BCPD).
Wavin, a plastic pipe manufacturing company from the Netherlands, has put Rp825 billion (US$52.6 million) investment in Indonesia to establish a production facility in the Batang Integrated Industrial Estate, Central Java, making it the country’s first production facility in the Southeast Asia Region.
Minister of Investment, Rosan P. Roeslani, officiated the initial production at PT KCC Glass Indonesia’s facility in the Batang Integrated Industrial Zone (KIT), Central Java. The factory represents a significant milestone in Indonesia’s glass manufacturing sector.
The Ministry of Energy and Mineral Resources (ESDM) has planned to proceed with the construction of the Dumai-Sei Mangkei gas transmission pipeline in Sumatra and target its completion in 2027.