Indonesia projects 9% growth for food and beverage manufacturing industry in 2019 with US$4.4bn investments

21-May-2019 - Last updated on 21-May-2019 at 01:51 GMT

The Indonesian Ministry of Industry (Keminperin) has predicted a growth of at least 9% for the country’s food and beverage industry this year, attributed to additional investment in the sector. ©Getty Images

The Indonesian Ministry of Industry (Keminperin) has predicted a growth of at least 9% for the country’s food and beverage industry this year, attributed to additional investment in the sector.

According to an official Keminperin press release, the food and beverage manufacturing sector in particular will receive investments worth IDR63tn (US$4.4bn), which is an increase of some 11% from 2018.

"The government will continue to boost performance and attract investment in export-oriented industrial sectors [such as food and beverage]," said Indonesian Minister of Industry Airlangga Hartanto.

“The products [from Indonesian domestic manufacturers] have achieved wide reach to a global audience.”

According to Tempo.co, the industry was also identified by Hartarto as the fifth-ranked highest-growing industrial sector in 2018 at 7.91% growth, behind machinery and equipment (9.49%), leather and footwear (9.42%), base metal (8.99%) and textile and textile products (8.73%).

Numbers from the Indonesian Central Statistics Agency or Badan Pusat Statistik (BPS) also showed the Indonesian F&B industry to be the biggest non-oil and gas contributor to GDP overall in 2018 at 6.25%. The next closest industry was transportation equipment at 1.76%.

Food and beverage is also expected to be one of the top sectors contributing to the growth of the country’s overall manufacturing industry, which has been targeted at 5.4%.

Overall targets

In March last year, Keminperin had set a IDR63.25tn (US$4.4bn) investment target for the national F&B industry as a whole for FY2018, which Indonesian Food and Beverage Association (Gapmmi) Chairman Adhi Lukman previously described as ‘realistic’ to Indonesian Investments.

The overall target set for 2019 direct investment into Indonesia’s F&B industry was IDR68.4tn (US$4.8bn), whereas F&B manufacturing in particular is looking at IDR63tn (US$4.4bn) worth of investments.

Investment targets have been continuously on the rise over the past 4 years, from IDR 39.3tn (US$2.8bn, 2015), to IDR58.6tn (US$4.1bn, 2016) to IDR59.2tn (US$4.14bn, 2017) to IDR63.25(US$4.4bn, 2018) and IDR68.4tn(US$4.8bn) this year.

In Keminperin’s report Kajian Peluang Pasar Produk Industri 4.0 (Report on Commodity Market Opportunites: Industry 4.0), the F&B sector’s contribution towards the manufacturing industry as a whole has not only been top-ranked but also on the rise since 2013, hitting 30.4% in 2017.

Industry 4.0 focus for Keminperin

In a separate statement, Hartarto highlighted the importance of Industry 4.0 to the country.

Following the revelation that Indonesian companies who had implemented Industry 4.0 in their operations had increased productivity by up to 40%, he said: “The benefits [of Industry 4.0] include added efficiency and productivity of up to 40%, which means that [the companies’] profits also can go up by 40%.”

“This means that the taxes paid will also increase, [and brings forth a win-win situation where] when the company is profitable, the government will also make profits.”

One of the companies highlighted by Hartarto was dairy firm PT. Indolakto, known for its Indomilk branded ranges of fresh milk, UHT RTD dairy beverages, condensed milks and other dairy products.