Realization of investment in the manufacturing sector during January-March 2022 reached IDR 103.5 trillion. This amount made a significant contribution of 36.7% to the total investment value in the country in the first quarter of 2022, which exceeded IDR 282.4 trillion.
“Investment in the industrial sector in the first quarter of 2022 rose 17% year on year. This means that amidst the global economic turmoil and the impact of the Covid-19 pandemic, investors’ confidence, especially from the industrial sector, is still very high,” said Minister of Industry Agus Gumiwang Kartasasmita in Jakarta, Thursday (28/4).
The Minister of Industry explained that his party was proactive in attracting national and global investors to continue investing in Indonesia. “This is to strengthen the domestic industrial manufacturing structure so that it can be more globally competitive,” he said.
In addition, continued Agus, the Government of Indonesia is determined to further create a conducive investment climate for business actors by providing various fiscal and non-fiscal incentives. “The increase in investment also shows that government policies are still on the right track,” he said.
The Ministry of Investment/Investment Coordinating Board (BKPM) noted, in the first quarter of 2022, the realization of domestic investment (PMDN) in the manufacturing industry sector amounted to IDR 25.6 trillion or contributed 18.9% to the total PMDN achievement which penetrated IDR 135.2 trillion.
The manufacturing sector that disbursed the most funds during this period was the food industry with a value of IDR 9.7 trillion through 2,181 projects. Then followed by the chemical and pharmaceutical industries in the amount of IDR 4.6 trillion (846 projects), and the basic metal, metal goods, non-machinery and equipment industries IDR 2.6 trillion (432 projects).
Meanwhile, in January-March 2022, the realization of foreign investment (PMA) in the manufacturing industry sector amounted to USD 5.4 billion or contributed 52.9% of the total achievement of FDI which was at USD 10.3 billion. “The manufacturing industry sector contributed the most to FDI realization in the first quarter of 2022,” said Agus.
As for the dominant contributor, the base metal industry, metal goods, non-machinery and equipment amounted to USD 2.5 billion with a total of 443 projects. Then followed by the chemical and pharmaceutical industries at USD 854 million (650 projects), the food industry at USD 686 million (951 projects), and the motor vehicle industry and other means of transportation at USD 542 million (468 projects).
“In total PMDN and PMA, the largest investment realization was contributed by the base metal industry, metal goods, not machinery and equipment amounting to IDR 39.7 trillion,” said Agus. This brilliant achievement is inseparable from the implementation of the industrial downstream policy, one of which is the nickel downstreaming effort which is being accelerated in supporting the acceleration of the development of the electric vehicle ecosystem with the development of the battery factory.
Referring to data from the Ministry of Investment/Investment Coordinating Board (BKPM), the total investment value in the first quarter of 2022 scored the highest growth record in the last 10 years, or grew 28.5% compared to the same period last year of IDR 219.7 trillion. Investment realization in the first quarter of 2022 has reached 23.5% of the target mandated by President Joko Widodo of IDR 1,200 trillion this year.
“We are optimistic that this target can be achieved. Therefore, it is necessary to have legal certainty and business certainty for industrial players in Indonesia to support the business climate,” said the Minister of Industry. Moreover, the Indonesian G20 Presidency event will be a momentum to open up opportunities and convey the potential for increasing investment cooperation, especially in the industrial sector.
“The Indonesian government will optimize the Trade, Investment and Industry Working Group (TIIWG) event to attract more global investors, especially from the G20 countries,” he added. However, to achieve this goal, synergistic and collaborative steps are required among all relevant stakeholders.
The Minister of Industry also appreciates industry players who are increasingly aggressive in expanding their business or expanding in Indonesia. “Because this has proven to have a broad impact on national economic recovery, including increasing the number of workers absorbed,” he concluded.
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