Indonesia’s manufacturing industry stands tall as a beacon of economic growth within the nation. Its significant contribution to Indonesia’s GDP showcases its resilience and potential. In this series of major industries in Indonesia, we’ll explore Indonesia’s manufacturing landscape, uncover a vibrant industry poised for remarkable growth in the years to come.
Indonesia Manufacturing Industry Outlook
Indonesia’s manufacturing industry is one of the key drivers of the country’s economic growth. It contributed 16.1% to Indonesia’s GDP in the third quarter of 2022, and is expected to continue to grow in the coming years.
The government of Indonesia is committed to developing the manufacturing sector, and has introduced a number of policies and initiatives to support its growth. These include the Making Indonesia 4.0 roadmap, which aims to transform Indonesia into a leading global manufacturing hub by 2030.
Key Trends Driving Growth
The Indonesian manufacturing industry is well-positioned to benefit from a number of trends, including:
Rising Domestic Demand
Indonesia has a large and growing middle class, which is driving demand for manufactured goods.
Indonesia is attracting increasing levels of foreign direct investment in the manufacturing sector.
Indonesia’s exports of manufactured goods are growing rapidly, particularly to other ASEAN countries and China.
Manufacturing Business Opportunities in Indonesia
There are a number of investment opportunities in the Indonesian manufacturing sector, including:
Food and Beverage
Indonesia is a major producer of food and beverage products, and there is strong demand for processed foods and drinks from the country’s growing middle class.
Textiles and Garments
Indonesia is a leading exporter of textiles and garments, and there is an opportunity to invest in upstream industries such as yarn and fabric production.
Indonesia is a major producer of electronics products, such as smartphones, TVs, and computers. There is an opportunity to invest in both the assembly and production of electronic components.
Indonesia is a major market for automobiles, and there is an opportunity to invest in the assembly and production of vehicles and components.
Indonesia is a major producer of chemical products, such as fertilizers, petrochemicals, and plastics. There is an opportunity to invest in both the upstream and downstream petrochemical industries.
Indonesia Manufacturing Business Regulation
The Indonesian government has a number of regulations in place to govern the manufacturing sector. These regulations are designed to promote investment, protect the environment, and ensure the safety of workers.
Some of the key regulations that manufacturing businesses in Indonesia need to be aware of include:
The Law on Industry (No. 3/2014)
This law sets out the overall framework for the development and regulation of the manufacturing sector in Indonesia.
The Law on Investment (No. 11/2020)
This law provides incentives for foreign investors, including tax breaks and simplified licensing procedures.
The Law on Environmental Protection and Management (No. 32/2009)
This law sets out the environmental standards that manufacturing businesses must comply with.
The Law on Manpower (No. 13/2003)
This law sets out the minimum employment standards that manufacturing businesses must comply with.
Also read: Understanding Indonesia Business Law
Top Manufacturing Companies in Indonesia
Here are some of the top manufacturing companies in Indonesia, along with their estimated market share:
- PT Gudang Garam Tbk: 15.2% (Cigarettes)
- PT Indofood CBP Sukses Makmur Tbk: 12.3% (Food and Beverage)
- PT Unilever Indonesia Tbk: 7.2% (Consumer Goods)
- PT Astra International Tbk: 6.9% (Automotive)
- PT Pertamina (Persero): 6.7% (Oil and Gas)
source: Statista, Disfold
How to Start a Manufacturing Company in Indonesia
To start a manufacturing company in Indonesia, you will need to follow these steps:
- Register Your Business: Begin by registering your business with the Ministry of Law and Human Rights.
- Obtain Necessary Licenses: Obtain the necessary licenses and permits from the relevant government agencies.
- Find a Suitable Location: Find a suitable location for your business, taking into account factors like proximity to suppliers and target markets.
- Purchase Equipment: Purchase the necessary equipment and machinery for your manufacturing operations.
- Hire Staff: Hire staff with the skills and expertise needed for your manufacturing processes.
- Market Your Products: Develop a marketing strategy to promote your products and services to your target audience.
The Indonesian government offers a number of resources and support services to help businesses get started. For more information, you can visit the website of the Investment Coordinating Board (BKPM).
The Indonesian manufacturing industry is a rapidly growing sector with a number of investment opportunities. If you are considering starting a manufacturing business in Indonesia, there are a number of resources and support services available to help you get started.
InvestinAsia is among the companies that specialize in aiding you with company registration in Indonesia. We boast a team of seasoned experts who can guide you throughout the process of:
- PMA registration in Indonesia (foreign company)
- Indonesia representative office set up
- Virtual office rent in Indonesia
- Business registration number in Indonesia
- Business License in Indonesia
If you are interested in starting a manufacturing business in Indonesia, you can start by contacting us for FREE consultation.