Manufacturing in Indonesia
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INDONESIA, 2015/02/22
Manufacturing was a key driver of the Indonesian economy from the 1980s up until the end of the 1990s. The sector continues to be a major source of employment for the country by employing 14.4 million people as per the end of 2010. From presently on productivity and increase levels have not matched that of regional competitors in core industries such as textiles. Indonesia presently faces a transformed world trading environment from its heyday; faced with fierce competition from free trade agreements across the ASEAN and China.
Such competition has served to highlight the inadequacies in areas such as technology, infrastructure inclunding the slow pace of reform in industry regulations to attract foreign investment . However a stable political and economic environment, the latter having been largely fuelled by domestic consumption, is raising confidence in the manufacturing sector for both local and international investors. Moving up the price added chain in order to fully take chance of the country’s wealth of natural resources will be the next step to raise Indonesia’s manufacturing competitiveness on the world stage.
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INDONESIA, 2015/02/22
The food and beverage sector is where Indonesia’s local companies have made a mark in price added products both domestically and worldwide. The increase of the sector has been fuelled by rising incomes and increased spending on food by the middle class that presently make up a 30 million person market. Urban lifestyles are giving rise to a additional varied diet which is supported by the development of retail infrastructure in the form of malls and hypermarts (see The Rise of Modern Retail Outlets).
For the country as a whole, price fluctuations brought about by the increasing price of imported goods such as wheat and processed chocolate can have a significant impact on consumer behaviour. The challenge for the food and beverage industry is to get a handle on import reliance to keep prices down and to strengthen branding for consumers in Indonesia inclunding the rest of the ASEAN.
