Industry Ministry And JICA Committed To Develop Potential Industry For The Future
The Industry Ministry and the Japan International Cooperation Agency (JICA) are working together in the development of potential industries for the medium and long term, such as transportation, electronics and food and beverage.
This step is manifested through a study in a number of Indonesian manufacturers, conducted by Nomura Research Institute under the title of “Promotion for Globally Competitive Study” for the period of April 2017-March 2018.
“We want to get inputs related to technical collaboration in all three sectors of the industry to up the level,” said Industry Minister Airlangga Hartarto after meeting with Senior Vice President of JICA Shinya Ejima on Wednesday (10/18).
The minister said the ongoing study aims to learn the supply chain in Indonesia so that it can be improved to support the respective industries. “We will also survey the small and medium industries (IKM) producing the automotive components in Tegal and Ceper, Central Java, to see how the supply chain is going.” JICA has encouraged the Japanese SMEs to invest in Indonesia in partnership with the local SMEs.
In the food and beverage industry, the Industry Ministry will develop the innovation centers, improve the food safety and product packaging. “We will support the post-harvest, packaging, and standardization for export. We think this can expand the market.”
Airlangga added the Indonesian commodities in high demand in Japan are cocoa, coffee, and shrimp. To increase their added value, Indonesia has participated in the Madrid Protocol, which is expected to make it easier to register the brands internationally. “There is also a geographical identification that can promote the products, such as Toraja Coffee and Gayo Coffee.“
In the electronics industry, the ministry is pushing this sector to support the transportation in the future, especially for trains, airplanes and electric cars.
In addition to the study, Industry Ministry and JICA have collaborated in three main projects. First, the cooperation in increasing the capacity of LED products. This cooperation is planned for three years in the form of capacity building and aid of test equipment.
The objective is to examine the suitability of SNI LED lamps with the market in Indonesia, to increase the cooperation between domestic industry and Japanese industry, and to tighten the supervision on the non-SNI LED circulation.
Second, a project to strengthen the industry of metal for construction equipment. Its activities include creating prototype of imported heavy equipment components, as well as industry guidance through supervision and training. The third project is increasing the capacity of cassava-based food processing in Timor Leste.
Senior Vice President of JICA Shinya Ejima said that the manufacturing sector in Indonesia must be upgraded to higher level through the sophistication of technology and research so that it has better competitiveness in the global market. “Through this study, we have a dialogue with the related industry players and the results will be finalized next year.”
At the Indonesia Investment & Business Forum (IIBF) in Nagoya, Industry Minister Airlangga Hartarto said that to commemorate the 60 years of diplomatic relations between Indonesia and Japan, it is necessary to celebrate it with an economic cooperation especially in industrial sector.
“Nagoya is the biggest investor from Japan in Indonesia with about 100 companies. This city is also a manufacturing center in Japan. For that, we want to establish long term investment cooperation with the investors of Nagoya,” said the minister.
The Japan-Indonesia trade in the second quarter of 2017 reached US$14.8 billion or an increase of five percent over the same period in 2016. This year, the total investment of Japan in Indonesia reached US$17 billion in the automotive, electronics, and food and beverages industries.
In front of hundreds of Japanese business people, the minister said Indonesia, as one of the G20 countries whose economy grew five percent in the last four years, is expected to grow more than five percent in the next two to three years. “Indonesia has earned the investment grade accreditation from various international institutions.”
Furthermore, Indonesia’s other strength is the largest market in Southeast Asia or controlling up to 50 percent of the total ASEAN countries with a value reaching US$1 trillion from its population of 240 million people. This potential, according to Airlangga, is very good for the business cooperation.
“Nagoya is a cluster of major manufacturing industries in Japan, primarily for the automotive and components. We see big companies like Toyota and Mitsubishi have committed to invest in Indonesia and to develop the innovation centers,” he added.
According to the minister, the manufacturing industry contributed more than 20 percent to the GDP. This figure ranks Indonesia at fourth after South Korea (29%), China (27%), Germany (23%). Therefore, Indonesia is included in the Top 15 world manufacturing countries.
“In the UNIDO data, Indonesia is ranked 9th. This achievement shows that Indonesia has been equal to the countries that are able to develop innovation. We only need to deepen and strengthen the existing industrial structure, and work together with a focus on the technological elements and the future of the two countries,” said Airlangga.