The Indonesian agro-processing industry grew at a rate of 6.39 percent in 2016, beating the overall non-oil-and-gas processing industry’s growth of 4.42 percent and domestic economic growth of 5.02 percent. In 2015, Growth of the agro-processing industry accelerated compared to 2015, when the industry grew by 5.82 percent.
The biggest contributors to the industry’s growth in 2016 were the food and beverage industry, which increased by 8.46 percent, followed by pulp and paper with 2.16 percent, wood products and handicraft with 1.8 percent, tobacco processing with 1.64 percent and the furniture industry with 0.47 percent.
The agro-processing industry is particularly strong in Indonesia. According to Panggah Susanto, Director General of the Indonesian Ministry of Agroindustry and Food Security, Indonesia is the world’s largest producer for many agro commodities that are processed into finished products. For example, Indonesia is the world’s largest producer of palm oil, dried seaweed, coconut and rattan, the second-largest producer of rubber and the third-largest producer of cocoa, according to the ministry.
To maintain the country’s lead role in the production of these commodities and to further develop the agro-processing industry, the government is developing new industrial estates specialized in processing particular commodities, such as palm oil in Sei Mangkei in North Sumatra and rattan in Palu in Central Sulawesi.