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Home arrow Latest News arrow Upstream Industrial Development is Key to Make Indonesia Manufacturing Center in Asia


				
			
			
Upstream Industrial Development is Key to Make Indonesia Manufacturing Center in Asia PDF Print E-mail
Written by Maizer   
Wednesday, 15 May 2019

The Ministry of Industry has declared Indonesia as manufacturing center in Southeast Asia. The industrial sector that is staying is a support such as textile and textile products, automotive, basic metals, food and beverage, and chemical industries.

 

Responding to this, the Chairperson of the Indonesian Textile Association (API) Ade Sudrajat Usman explained that in order to become an industrial center, the upstream industry needed to be cleared up.

 

"Industrialization competitiveness needs to be supported by an efficient and inexpensive upstream industry, because after all the dependence on raw materials will be even greater," Ade said.

 

Ade gave an example, Indonesia needs large paracillin ingredients. This basic raw material comes from oil, gas or from palm oil. It is this upstream industry that must exist in Indonesia, so that it can develop thousands of types of industries with these raw material components.

 

"If you don't have an upstream industry, it's very difficult to realize Indonesia as an industrial center," Ade concluded.

 

In line with Ade, Yerry Indroes, Executive Director of the Indonesian Iron and Steel Industry Association (IISIA) said, there needs to be cooperation from upstream to downstream in the manufacturing process.

 

Larger steel industries play role in the upstream sector in the manufacturing process. Yerry explained, there needs to be a policy from the government to prioritize domestic steel industry as raw material in the upstream process of manufacturing.

 

With Indonesia being manufacturing center in Southeast Asia, Yerry admitted this could affect the composition of the steel market so far.

 

"Currently 60% to 70% of the steel industry is absorbed for construction, the rest is for manufacturing," Yerry said.

 

The existence of this plan is expected to increase  composition of  steel industry market in the manufacturing sector. He added, with the change in composition it is possible to push the capacity of the national steel industry.

 

While in terms of quality and quantity of steel, Yerry believes domestic steel industry is able to meet the needs of manufacturing industry later.

 

Although in terms of quality, it needs to be encouraged by research and development in order to meet the standards of need. "And this needs to be accompanied by enthusiasm for using domestic steel industry products," he explained.

 

Deputy Chair of the Indonesian Plastic Industry Association (Inaplas) Suhat Miyarso considers Indonesia to have large and complete resources for industrialization.

 

"For the steel industry and the strong chemical industry, we can build a very diverse downstream industry to meet domestic needs and exports," he explained.

 

Suhat is optimistic that in the future Indonesia can become center of manufacturing industry in Southeast Asia, because Indonesia has abundant coal, gas, natural rubber, CPO, minerals and human resources.

 

He added, the large Indonesian market could encourage industries that were built on a large scale to be more economical and competitive.

 

 

 
		
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