Monday, 27 May 2019 | 19:08 WIB

National Manufacturing Industry’s Contribution to GDP Grows to 19.86 Percent

Indonesia Minister of Industry Airlangga Hartarto (netralnews)

JAKARTA, NETRALNEWS -- The Indonesia Ministry of Industry actively spurs the growth of the national manufacturing industry. In 2018, the growth of the non-oil and gas industry was recorded at 4.77 percent or was able to contribute 19.86 percent of the national Gross Domestic Product (GDP). The value of the GDP of the manufacturing industry in that year touched IDR2.95 thousand trillion. Meanwhile, national GDP was monitored perched at IDR14.84 thousand trillion.

"There are a number of high-growth sectors, such as the transportation and automotive industries growing 9.49 percent, leather and footwear industries 9.42 percent, base metal industry 8.99 percent, textile industry and textile products 8.73 percent, and industries food and beverages 7.91 percent, "said Indonesia Minister of Industry Airlangga Hartarto when he was a speaker at the 2019 Ministry of Trade Working Meeting in Jakarta on Wednesday (03/13/2019).

According to Airlangga, those sectors that experienced high growth were the mainstay sectors in the Making Indonesia 4.0 road map.

"Then if we look at the export performance, the number of industrial product exports in 2018 was USD 130.09 billion or an increase of 3.98 percent compared to 2017 which only reached USD 125.10 billion. Exports of industrial products contributed to 72.19 percent of the total "National exports in 2018 are worth USD180.21 billion," he said.

Airlangga said, when viewed from each industry sector, there are several other sectors that might be aggressively driven, from the agro industry sector, for example, to the furniture industry. The Ministry of Industry noted, the export performance of the Indonesian furniture industry in the last three years showed a positive trend.

In 2016, the export value was 1.60 billion US dollars, up to 1.63 billion US dollars in 2017. Throughout 2018, the value of exports of national furniture products again increased to 1.69 billion US dollars, up 4 percent compared to 2017 .

"It is targeted that the furniture industry sector can double," he said.

Airlangga revealed that the source of wood raw material in Indonesia is very large, considering the vast potential of forests to 120.6 million hectares consisting of production forests reaching 12.8 million hectares. Therefore, the government seeks to optimize the potential of the national furniture industry through a number of policies, including through technical guidance programs on production, promotion and development of market access, as well as competent preparation of furniture industry HR.

In the chemical, pharmaceutical and textile sectors there are several sectors whose export value can be aggressively driven, namely the rubber industry. Airlangga said, one of the players in the rubber industry in Indonesia, Michelin, officially bought the shares of PT Multistrada Arah Sarana Tbk (MASA). This transaction was carried out in the negotiating market through crossing (own closing transaction) via Trimegah Securities worth Rp. 6.8 trillion.

Multistrada is a local tire manufacturer that has a production capacity of more than 180 thousand tons consisting of 11 million units of four-wheeled passenger vehicles, 9 million two-wheeled vehicle tires and 250 thousand truck tires. In 2017, MASA's net sales were recorded at US $ 281 million.

"Furthermore, expansion will also be made to the aircraft retreading tire industry for Garuda Indonesia and Lion Air. If we talk about the rubber industry, most of which use natural rubber are tire products for large low-speed load vehicles. Therefore, aircraft tires will require more natural rubber. We also encourage exports to increase, "Airlangga added.