investment potentials in metal, machineries and ... · investment potentials in metal, machineries...
TRANSCRIPT
Investment Potentials in Metal Machineries and Electronics Industry
Presented by
Willem P Riwu (Deputi Director for Industrial Model Ananlisys- Agencies for the Assessment of Industrial Policy Climate and Standard)
Indonesia Investment Seminar
Seoul September 28 2011 Coordinated by
Indonesia Investment Coordinating Board and ASEAN ndash Korea Center
bull The largest archipelagic country
- Islands more than 17508
- Land plusmn 2 million km2
- Sea plusmn 58 million km2
- Coastal line plusmn 81000 km
bull Population 238 millions
bull Natural Resources petroleum tin natural gas
nickel timber bauxite copper fertile soils coal
gold
bull Industries petroleum and natural gas textiles
apparel footwear mining cement
chemical fertilizers plywood rubber CPO
cocoa food tourism
bull Export commodities oil amp gas electrical
appliances plywood textiles rubber transport
equipments electronics automotive pulp and
paper
2
Indonesia
2
Malaysia
Key indicators (2008)
Population (millions) 270
GDP (US$ billions) 2222
GDP per capita
US$ 8140
GDP (PPP) () of world total 056
Thailand
Key indicators (2008)
Population (millions) 643
GDP (US$ billions) 2732
GDP per capita
US$ 4115
GDP (PPP) of world total 080
Korea Rep
Key indicators (2008)
Population (millions) 484
GDP (US$ billions) 9470
GDP per capita
US$ 19504
GDP (PPP) of world total 185
Indonesia Key indicators (2008) Population (millions) 2343 GDP (US$ billions) 5118
GDP per capita US$ 22463 GDP (PPP) as share () of world total 2008 131
Benchmarking
2014
US$ 450000
The ASEAN region with its 10 member states a total population of 600 million people
and $17 trillion economy is strategically nestled between India and China and has
become an attractive alternative for investment amid the global volatility triggered by concerns about the European sovereign debt crisis and economic slowdown in the US
3
1 Manufacturing Industry Strategy
4
4
2025
LONG TERM VISION
ldquoto become a strong industrial nation by 2025ldquo
5
MANUFACTURE INDUSTRY BASED
FUTURE PRIMELEADING INDUSTRIES
TRANSPORT
EQUIPMENT
INDUSTRY
HUMAN RESOURCES
AGRO
INDUSTRY
CHEMICAL
CEMENT
STEEL
ETC
TEXTILE
FOOTWEAR
ELECTRONICS
ETC
CAPITAL GOODS INDUSTRY
COMPONENT INDUSTRY
(SMErsquos BASED)
RENEWABLE RESOURCES NON-RENEWABLE RESOURCES
ICT
INDUSTRY
RESEARCH amp DEVELOPMENT
REGIONAL BASED CORE COMPETENCE INDUSTRIES
INNOVA-TION
FUTURE INDUSTRYrsquoS STRUCTURE (Year 2025)
Faci
litat
e m
aste
ry o
f in
du
stri
al t
ech
no
logy
ldquoto strengthen the competitiveness of sustainable base manufacturing industry and built a pillar of future prospective
industry by 2014rdquo
SHORT TERM VISION
7 Strategic Goals 2010-2014
7
Background
Contraction in industrial growth and rapid global change in the industrial environment has encouraged Ministry of Industry to review all existing measures for better future of growth of manufacturing industry
8
8
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
bull The largest archipelagic country
- Islands more than 17508
- Land plusmn 2 million km2
- Sea plusmn 58 million km2
- Coastal line plusmn 81000 km
bull Population 238 millions
bull Natural Resources petroleum tin natural gas
nickel timber bauxite copper fertile soils coal
gold
bull Industries petroleum and natural gas textiles
apparel footwear mining cement
chemical fertilizers plywood rubber CPO
cocoa food tourism
bull Export commodities oil amp gas electrical
appliances plywood textiles rubber transport
equipments electronics automotive pulp and
paper
2
Indonesia
2
Malaysia
Key indicators (2008)
Population (millions) 270
GDP (US$ billions) 2222
GDP per capita
US$ 8140
GDP (PPP) () of world total 056
Thailand
Key indicators (2008)
Population (millions) 643
GDP (US$ billions) 2732
GDP per capita
US$ 4115
GDP (PPP) of world total 080
Korea Rep
Key indicators (2008)
Population (millions) 484
GDP (US$ billions) 9470
GDP per capita
US$ 19504
GDP (PPP) of world total 185
Indonesia Key indicators (2008) Population (millions) 2343 GDP (US$ billions) 5118
GDP per capita US$ 22463 GDP (PPP) as share () of world total 2008 131
Benchmarking
2014
US$ 450000
The ASEAN region with its 10 member states a total population of 600 million people
and $17 trillion economy is strategically nestled between India and China and has
become an attractive alternative for investment amid the global volatility triggered by concerns about the European sovereign debt crisis and economic slowdown in the US
3
1 Manufacturing Industry Strategy
4
4
2025
LONG TERM VISION
ldquoto become a strong industrial nation by 2025ldquo
5
MANUFACTURE INDUSTRY BASED
FUTURE PRIMELEADING INDUSTRIES
TRANSPORT
EQUIPMENT
INDUSTRY
HUMAN RESOURCES
AGRO
INDUSTRY
CHEMICAL
CEMENT
STEEL
ETC
TEXTILE
FOOTWEAR
ELECTRONICS
ETC
CAPITAL GOODS INDUSTRY
COMPONENT INDUSTRY
(SMErsquos BASED)
RENEWABLE RESOURCES NON-RENEWABLE RESOURCES
ICT
INDUSTRY
RESEARCH amp DEVELOPMENT
REGIONAL BASED CORE COMPETENCE INDUSTRIES
INNOVA-TION
FUTURE INDUSTRYrsquoS STRUCTURE (Year 2025)
Faci
litat
e m
aste
ry o
f in
du
stri
al t
ech
no
logy
ldquoto strengthen the competitiveness of sustainable base manufacturing industry and built a pillar of future prospective
industry by 2014rdquo
SHORT TERM VISION
7 Strategic Goals 2010-2014
7
Background
Contraction in industrial growth and rapid global change in the industrial environment has encouraged Ministry of Industry to review all existing measures for better future of growth of manufacturing industry
8
8
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Malaysia
Key indicators (2008)
Population (millions) 270
GDP (US$ billions) 2222
GDP per capita
US$ 8140
GDP (PPP) () of world total 056
Thailand
Key indicators (2008)
Population (millions) 643
GDP (US$ billions) 2732
GDP per capita
US$ 4115
GDP (PPP) of world total 080
Korea Rep
Key indicators (2008)
Population (millions) 484
GDP (US$ billions) 9470
GDP per capita
US$ 19504
GDP (PPP) of world total 185
Indonesia Key indicators (2008) Population (millions) 2343 GDP (US$ billions) 5118
GDP per capita US$ 22463 GDP (PPP) as share () of world total 2008 131
Benchmarking
2014
US$ 450000
The ASEAN region with its 10 member states a total population of 600 million people
and $17 trillion economy is strategically nestled between India and China and has
become an attractive alternative for investment amid the global volatility triggered by concerns about the European sovereign debt crisis and economic slowdown in the US
3
1 Manufacturing Industry Strategy
4
4
2025
LONG TERM VISION
ldquoto become a strong industrial nation by 2025ldquo
5
MANUFACTURE INDUSTRY BASED
FUTURE PRIMELEADING INDUSTRIES
TRANSPORT
EQUIPMENT
INDUSTRY
HUMAN RESOURCES
AGRO
INDUSTRY
CHEMICAL
CEMENT
STEEL
ETC
TEXTILE
FOOTWEAR
ELECTRONICS
ETC
CAPITAL GOODS INDUSTRY
COMPONENT INDUSTRY
(SMErsquos BASED)
RENEWABLE RESOURCES NON-RENEWABLE RESOURCES
ICT
INDUSTRY
RESEARCH amp DEVELOPMENT
REGIONAL BASED CORE COMPETENCE INDUSTRIES
INNOVA-TION
FUTURE INDUSTRYrsquoS STRUCTURE (Year 2025)
Faci
litat
e m
aste
ry o
f in
du
stri
al t
ech
no
logy
ldquoto strengthen the competitiveness of sustainable base manufacturing industry and built a pillar of future prospective
industry by 2014rdquo
SHORT TERM VISION
7 Strategic Goals 2010-2014
7
Background
Contraction in industrial growth and rapid global change in the industrial environment has encouraged Ministry of Industry to review all existing measures for better future of growth of manufacturing industry
8
8
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
1 Manufacturing Industry Strategy
4
4
2025
LONG TERM VISION
ldquoto become a strong industrial nation by 2025ldquo
5
MANUFACTURE INDUSTRY BASED
FUTURE PRIMELEADING INDUSTRIES
TRANSPORT
EQUIPMENT
INDUSTRY
HUMAN RESOURCES
AGRO
INDUSTRY
CHEMICAL
CEMENT
STEEL
ETC
TEXTILE
FOOTWEAR
ELECTRONICS
ETC
CAPITAL GOODS INDUSTRY
COMPONENT INDUSTRY
(SMErsquos BASED)
RENEWABLE RESOURCES NON-RENEWABLE RESOURCES
ICT
INDUSTRY
RESEARCH amp DEVELOPMENT
REGIONAL BASED CORE COMPETENCE INDUSTRIES
INNOVA-TION
FUTURE INDUSTRYrsquoS STRUCTURE (Year 2025)
Faci
litat
e m
aste
ry o
f in
du
stri
al t
ech
no
logy
ldquoto strengthen the competitiveness of sustainable base manufacturing industry and built a pillar of future prospective
industry by 2014rdquo
SHORT TERM VISION
7 Strategic Goals 2010-2014
7
Background
Contraction in industrial growth and rapid global change in the industrial environment has encouraged Ministry of Industry to review all existing measures for better future of growth of manufacturing industry
8
8
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
2025
LONG TERM VISION
ldquoto become a strong industrial nation by 2025ldquo
5
MANUFACTURE INDUSTRY BASED
FUTURE PRIMELEADING INDUSTRIES
TRANSPORT
EQUIPMENT
INDUSTRY
HUMAN RESOURCES
AGRO
INDUSTRY
CHEMICAL
CEMENT
STEEL
ETC
TEXTILE
FOOTWEAR
ELECTRONICS
ETC
CAPITAL GOODS INDUSTRY
COMPONENT INDUSTRY
(SMErsquos BASED)
RENEWABLE RESOURCES NON-RENEWABLE RESOURCES
ICT
INDUSTRY
RESEARCH amp DEVELOPMENT
REGIONAL BASED CORE COMPETENCE INDUSTRIES
INNOVA-TION
FUTURE INDUSTRYrsquoS STRUCTURE (Year 2025)
Faci
litat
e m
aste
ry o
f in
du
stri
al t
ech
no
logy
ldquoto strengthen the competitiveness of sustainable base manufacturing industry and built a pillar of future prospective
industry by 2014rdquo
SHORT TERM VISION
7 Strategic Goals 2010-2014
7
Background
Contraction in industrial growth and rapid global change in the industrial environment has encouraged Ministry of Industry to review all existing measures for better future of growth of manufacturing industry
8
8
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
MANUFACTURE INDUSTRY BASED
FUTURE PRIMELEADING INDUSTRIES
TRANSPORT
EQUIPMENT
INDUSTRY
HUMAN RESOURCES
AGRO
INDUSTRY
CHEMICAL
CEMENT
STEEL
ETC
TEXTILE
FOOTWEAR
ELECTRONICS
ETC
CAPITAL GOODS INDUSTRY
COMPONENT INDUSTRY
(SMErsquos BASED)
RENEWABLE RESOURCES NON-RENEWABLE RESOURCES
ICT
INDUSTRY
RESEARCH amp DEVELOPMENT
REGIONAL BASED CORE COMPETENCE INDUSTRIES
INNOVA-TION
FUTURE INDUSTRYrsquoS STRUCTURE (Year 2025)
Faci
litat
e m
aste
ry o
f in
du
stri
al t
ech
no
logy
ldquoto strengthen the competitiveness of sustainable base manufacturing industry and built a pillar of future prospective
industry by 2014rdquo
SHORT TERM VISION
7 Strategic Goals 2010-2014
7
Background
Contraction in industrial growth and rapid global change in the industrial environment has encouraged Ministry of Industry to review all existing measures for better future of growth of manufacturing industry
8
8
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Faci
litat
e m
aste
ry o
f in
du
stri
al t
ech
no
logy
ldquoto strengthen the competitiveness of sustainable base manufacturing industry and built a pillar of future prospective
industry by 2014rdquo
SHORT TERM VISION
7 Strategic Goals 2010-2014
7
Background
Contraction in industrial growth and rapid global change in the industrial environment has encouraged Ministry of Industry to review all existing measures for better future of growth of manufacturing industry
8
8
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Background
Contraction in industrial growth and rapid global change in the industrial environment has encouraged Ministry of Industry to review all existing measures for better future of growth of manufacturing industry
8
8
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Direction of Industrial Development
Selected industries are intensively promoted
in order to increase capacity strengthen the
industrial structure and improve the over all
Competitiveness
9
9
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Labor Intensive Industry
Small and Medium industry
Capital Intensive industry
Natural resources based industry
High Growth industry
Special Priority industry
bull Textile industry bull Footwear industry bull Furniture industry bull Sugar industry
bull Fertilizer industry bull Petrochemical
industry
bull Automotive electronics and IT industry
bull Capital goods industry
bull Shipbuilding industry
bull Food and Beverages industry bull Downstream CPO industry bull Downstream rubber industry bull Downstream cocoa industry bull Downstream iron metal and steel
industry bull Seaweed industry
bull Fashion industry bull Craft industry bull Precious Stone industry bull Ceramic industry bull Essential oil industry
10
Focus on 6 (six) groups of industrial Priority
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
ldquoProduction Centers for Crops Processing and National Energy ldquo bull CPO bull Coal bull Rubber bull Shipbuilding
ldquoProduction Centers for Mines Processing and National Energyldquo bull Oil amp Gas bull Coal bull Aluminum bull Steel
ldquoNational Production amp Processing Centers for Agricultural Plantation amp Fisheries Productsrdquo bull Nickel bull Fisheries bull Food crops bull Plantation
Sumatera Corridor
Kalimantan Corridor
Sulawesi Corridor
ldquoThe Gate to National Tourism amp National Food Supportrdquo bull Tourism bull Agriculture amp Fisheries
ldquoNational Service amp Industrial Pillarsrdquo bull Textiles bull Machineries amp Transport
Equipments bull Food amp Beverages bull ICT
ldquoUtilization of Abundant Natural Resources amp Prosperous Human Resourcesrdquo bull Food amp Energy Estate bull Mining bull Oil amp Gas
Java Corridor Bali-Nusa Tenggara Corridor
Papua-Maluku Corridor
Indonesia Economic Development Corridors (IEDCs)
11
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
1 Palm Oil Processing 2 Rubber Processing 3 Coal Processing 4 Nickel Processing 5 Copper Processing 6 Oil amp Gas Processing 7 Food amp Beverages
Processing 8 Textile 9 Machineries amp
Transportation Equipments 10 Shipbuilding 11 Steel Processing 12 (Metal) Aluminum
Industries 13 ICT
AIndustries 1 Steel Industries 2 Food amp Beverage
Industries 3 Textile Industries 4 Machineries amp
Transport Equipment Industries
5 Maritime Industries
CAgriculture amp Plantation 9 Oil Palms 10 Rubber 11 Food amp Non Food
Estate
D Marine 12 Fisheries
E Tourism 13 Tourism Development
F Telecommunication 14 ICT Industries
G Energy 15 Coal 16 Oil amp Gas
H Districts 17 Sunda Strait 18 Jabodetabek
BMining 6 Nickels 7 Coppers 8 BauxitesAluminum
Industrial Priorities
19 National Connectivity Reinforcement
20 Science amp Technology Capacity Building
Main Sectors of IEDCs
12
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
No Corridor Industrial Priorities
I Sumatera a Palm Oil Processing b Rubber Processing c Coal Processing d Shipbuilding
II Java a Rubber Processing b Shipbuilding c ICT d Machineries amp Transportation Equipments e Textile
III Kalimantan a Palm Oil Processing b Steel Processing c Metal (Aluminum) Processing d Coal Processing
IV Sulawesi ndash Northern Maluku a Cocoa Processing b NickelProcessing
V Bali ndash NT ) Agriculture amp tourism
VI Papua - Maluku a Copper Processing b Oil and gas Processing
) Under the Ministry of Agriculture and the Ministry of Culture amp Tourism
13
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
2 Insentif Investment
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Investment Incentives Offered
1 30 percent reduction on net income of investment value distributed in 6 years with 5 percent of each
2 Accelerated amortization (categories 2 4 8 and 10 years depend of group of assets)
3 Income tax of the dividend paid to the foreign investor for 10 percent or lower tariffs according to the agreement on the double taxation avoidance
4 Compensation for the lost that is more than 5 (five) years but less than 10 (ten) years
15
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Legislative Measures for Incentives
bull Article 18 and Article 21 Law of The Republic of Indonesia Number 25 of 2007 concerning investments
bull Government Regulation Number 1 of 2007 concerning income tax facilities in investing in several special sectors in particular regions renewed by Government Regulation No 62 of 2008
bull Incentives offered will be reviewed every 2 years
16
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Industries Entitled for Incentive
The incentives for industrial sector will be provided for specific industry a High priority Industry including national priority industry regional
priority industry and regional core competency industry b Pioneer industry c Industry in isolated region abandonment outskirt or other region if
necessary d Industry which is supporting R amp D e Industry which is supporting infrastructure development f Industry with technological shifting g Green industry h Industry which is cooperating with small and medium Enterprise i Industry with high local content or j Labor intensive industry
17
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
18
Policies supporting industrial competitiveness
Incentives Other Policies
(Competitiveness and Security Policies)
Fiscal Incentives 1 Income tax reduction for investment in
particular sectors andor particular regions
2 Tax Holiday 3 Tariff redemption in importing machine
raw material for particular industries for new investment and expansion and
4 Government Borne Value Added Tax (PPN-DTP)
Non-Fiscal Incentives 1 Interest rate reduction for particular
industries (restructuring of machineries) 2 Integrated One Stop Services in
Investment Sector (PTSP) and 3 Electronic Investment Licensing and
Information Service System (SPIPISE)
Trade Remedies Safeguards Duties Anti Dumping Duties Countervailing Duties
Export duties
Indonesian National Standard (SNI)
Export Restriction
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
19
Income tax reduction for investment in particular sectors andor particular regions (Amandement of Government Regulation No 622008)
Investment Incentive is offered to
I Certain Industries
Fiscal Incentives
NO BIDANG USAHA 1 Food priducts industry
Cocoa chocolate and sugar confectionery industry
2 Industri Makanan Bayi 3 Textile industry
Facbris manufacture industry
4 Coke and refined petroleum products industry Refined petroleum products industry
5 Chemicals and chemical products industry Other inorganic compounds industry
6 Basic organic chemicals from agricultural industry 7 Basic organic chemicals for dyes and pigments industry
8 Basic organic chemicals from coke and natural gaseous industry
9 Organic chemicals for special chemical products industry
10 Synthetic resin and plastic material industry 11 Synthetic rubber industry 12 Cosmetics and cosmetics material and toothpaste industry
13 Synthetic staple fiber industry 14 Pharmaceuticals Medicinal Chemical and Botanical Products Industry
Pharmaceutical material industry
15 Rubber and Plastics Products Industry Tubes for tyres industry
16 Basic Metals Industry Iron and Steel Making Industry
NO BIDANG USAHA 17 Fabricated Metal Products Except Machinery and Equipment Industry
Wire Industry 18 Computer Electronic and Optical Products Industry
Semi conductor and other electronic components industry
19 TV andor TV assembly industry
20 Electronic measurement and testing tools industry
21 Electrical Equipment Industry Electrical Equipment Industry
22 Dry cell batteries industry 23 Gas tube lamp industry 24 House electrical equipment industry
25 Machineryand Equipment Industry
Engines and turbines except aircraft vehicle and cycle engines industry
26 Photocopy machine industry 27 Engine coolent industry 28 Metal equipment and machineries industry
29 Mining Digging and Construction industry
30 Textile machineries industry
31 Industri Mesin Keperluan Khusus lainnya Other specific machineries industry
32 Motor vehicles Trailers and Semi trailers Industry
Sparepart and accessories for four wheel or more vehicles industry
33 Other transport eqipment industry
Ship and boat industry 34 Component and other motor cycle eqipment industry
35 Repair and Installation of Machinery and Eqipment
Repair of Ship boat and floating building industry
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
20
II Certain Industries and Certain Regions
No
Certain Industries Certain regions
Food Products Industry
1 Canned Fruits and Vegetables preservation and processing industry
Noerth Sumatera NTB Riau and Kepulauan Riau Sulawesi Selatan West Sulawesi West Kalimantan West Java and East Jave Jawa
2 Essence of fruits and vegetables processing industry
North Sumatera South Sulawesi Riau West Sulawesi and NTB
3 Margarine industry Sumatera corridor and Kalimantan corridor
4 Coconut cooking oil industry North Sulawesi South Sulawesi Central Sulawesi Sotheast Sulawesi West Sulawesi Barat and Gorontalo
5 Cooking oil industry Sumatera corridor and Kalimantan corridor
6 Vegetable oil industry All Provinces except Java island
7 Cocoa industry Sulawesi corridor
8 Coffe and tea processing industry
Aceh North Sulawesi Bengkulu South Sumatera Lampung Bali South Sulawesi NTT Papua and Papua Barat West Sulawesi
Textile Industry
9 Textile fibre preparation industry North Sulawesi Central Sulawesi Southeast Sulawesi West Sulawesi Gorontalo NTB and NTT
10 Carpet and rug industry Java corridor
11 Non woven industry Java corridor
Leather and Product Leather and Footwear Industry
12 Tannery industry NTT NTB West Sumatera
13 Footwear industryIndustri Alas Kaki
NTT NTB West Sumatera
14 Sportshoes industry NTT NTB West Sumatera
15 Boottechnical shoes industry NTT NTB West Sumatera
Paper and Paper Product Industry
16 Pulp Industry All Provinces except Java island
No
Certain Industries Certain regions
17 Paper culture industry All Provinces except Java island
18 Valuable paper industry All Provinces except Java island
19 Specialty paper industry All Provinces except Java island
20 Paper and corrugated board paper industry
All Provinces except Java island
21 Packaging box from paper and cardboars industry
Out of Java island
22 Tisue paper industry All Provinces except Java island
Chemicals and chemical products industry
23 Basic chemistry of inorganic chlorine alkali industry
NTT
24 Basic organic chemicals from agricultural industry
North Sumatera Riau Jambi Lampung Bengkulu West Kalimantan East Kalimantan Central Kalimantan South Kalimantanl Aceh Papua and West Papua West Sumatera South Sumatera
25 Explosive material industry West Java
Non Metal Mineral Goods Industry
26 Cement industry Out of Java Tuban and Grobogan
27 Iron and steel making industry Kalimantan corridor
28 Basic precious metal processing industry
All Provinces except Java island
29 Non ferro processing metal industry Kalimantan papua and Sulawesi corridor
30 Non iron metal milling industry Kalimantan papua and Sulawesi corridor
Other tranportation eqipment Industry
31 Ship and boat industry East Jawa Kalimantan Sulawesi Maluku Papua NTB and NTT
32 Ship equipment and supplies industry
Java and Sumatera corridor
Repair and InstAllation of Machinery and Eqipment
33 Repair of Ship boat and floating building industry
East Javar Kalimantan Sulawesi Maluku Papua NTB and NTT
Waste treatment industry
34 Treatment and disposal of harmless waste industry
All Provinces except Java island
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
21
Tax Holiday (Government Regulation No 942010)
The tax holiday incentive for industrial sector will be provided for invesment amounting Rp 1 Trillion or more to certain industries 1 Basic metal industries 2 Refinery and basic petrochemical industries 3 Machinery industries 4 Renewable resources industries 5 Telecommunication component industries
Import duty redemption in importing machine raw material for particular industries for new investment and expansion (Minister of Finance Decree No1762009)
Criteria 1 For new and expansion investment (Foreign amp Domestic Investment) 2 For machines an and raw materials that
a Not yet produced in Indonesia b Have been produced in Indonesia but not fulfill for technical requirements c Have been produced in Indonesia but not yet enough to supply the needs of industries
Fiscal Incentives
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
22
Government Borne Value Added Tax (PPN-DTP)
The PPNDTP incentive is being provided to stimulate the development of the real
sector and to help industries This incentive covers certain matters
a Cooking oil
b Geothermal
c CO2 Emission Reduction
d Certain fuel and 3 kg LPG tubes
Fiscal Incentives
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
23
Non-Fiscal Incentives
Interest rate reduction for particular industries (restructuring of machineries)
Since 2007 Government has launched incentive for restructuring machineries in order to increase productivity and competitiveness for textile sugar and footwear industries
Integrated One Stop Services in Investment Sector (PTSP)
Regulations bull Presidential instruction No 12010 concerning Acceleration of Implementation
National Development Priority bull Presidential Decree No 272009 concerning Integrated One Stop Services in
Investment Sector The aims bull To cut bureucratic procedures bull Allow investors to process business license faster bull Accelerate and simplify the procedures of investment and bull Reduce administration fees
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
24
Regulations bull Chairman of Investment Coordinating Board Decree No 142009 concerning
Electronic Investment Licensing and Information Service System (SPIPISE) The aims bull Ease of licensing process tracking bull Single submission of data amp information bull Single and synchronous processing of data and information bull Single Decision-making for investment information amp licensing process
Electronic Investment Licensing and Information Service System (SPIPISE)
Non-Fiscal Incentives
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
25
Other Policies
Indonesian National Standard (SNI)
Regulations bull Government Regulation No 1022000 concerning National Standardization bull Minister of Industry Decree No 86M-INDPER92009 Concerning National
Standardization in Industrial Sectors The aims bull Improve the quality of domestic products bull Efficiency and fair competition of products bull Consumer protection Present condition of SNI application Out of 3969 SNI applications 73 are mandatory SNIs
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
26
Other Policies
Export duties (Minister of Finance Decree No 672010)
Regulations bull Minister of Finance Decree No 672010 concerning imposition of tax and duty of
export products The aims bull Ensuring the availability of raw materials for domestic needs bull Environment conservation of natural resources Present condition Raw materials that have been imposed export tax and duty Leather Cocoa Rattan CPO and its derivatives
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
27
Other Policies
Export Restriction
Due to excessive exploitation of non renewable resources which have been exported without any further processed the Government plans to manage the exploitation of such resources in the proper ways through export restriction The aims bull Environment conservation bull Maintain the raw material supply for industries bull Increase value added
Trade Remedies (Safeguards Duties Anti Dumping Duties Countervailing Duties)
In the case of injury to domestic industries caused by surge import dumped prices and subsidy of other countries the Government can take action through trade remedy policies
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
1 Act No252007 concerning capital investment necessary to create a more conducive and promotable investment climate the business sectors that are closed for foreign investment weapons ammunition explosives and war equipment (Article 12) Facilities for new capital investment and expansion are income tax import duty (capital goods amp raw material) value added tax (Article 18)
2 Government Regulation No12007 jo No622008 concerning Income Tax Facility dor Particular Business Sectors andor Region KBLI 27101 amp 27102 (ferrous industry) KBLI 27201 27202 27203 amp 27204 (non ferrous industry)
3 President Regulation No282008 concerning National Industry Policy Fiscal amp Non Fiscal Facility (Article 4) Forming Investment amp Export Promoted National Team or Tim PEPI (Article 5)
4 Government Regulation of RI No 202000 and No 1472000 concerning Tax Treatment at Integrated Economic Development Zone (KAPET) Industrial Zone (The Industrial Zone located in 13 provinces and 26 district in Indonesia Nowadays the Industrial Zone contribute for 74 non oil amp gas export from 86 Industrial Zone with values about US$ 45 billion and provide work for 6180n 00 employees)
5 Minister of Finance Decree No1352000 concerning Tariff Reducing on Capital Goods amp Raw Material for New Investment and Expansion
6 Minister of Industry Regulation No1022009 concerning Promoted of Local Production Utilization of Government Expenditure (APBNAPBDPHLNKKKS) and Forming P3DN Team in each Government Institution (Regulated Government purchased to local product which has local content (combination between TKDN + BMP) at least 40 and more)
28
Ministry of Industry
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
3 NATIONAL INDUSTRI PERFORMANCE
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
GDP STRUCTURE (CP) Periode 2006 ndash2011 (Q2)
30
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
1 Agriculture livestock Forestry and Fishery 1297 1372 1446 1529 1534 1561 1540
2 Mining and Excavating 1098 1115 1092 1054 1115 1175 1156
3 Manufacture Industry 2754 2705 2789 2638 2482 2411 2430
a Oil amp Gas Industry 515 461 489 381 327 306 331
b Non-Oil amp Gas Industry 2238 2243 2300 2257 2155 2105 2099 4 Electricity Gas and Clean Water 091 088 082 083 078 076 077
5 Construction 752 772 848 989 1029 1001 1014
6 Trade Hotel and Restaurant 1502 1499 1397 1337 1372 1366 1386
7 Transport and Telecommunication 693 669 631 628 650 661 644
8 Finance Leasing and Service 806 773 743 720 721 741 723
9 Services 1007 1008 973 1022 1019 1008 1029
Product Domestic Bruto 10000 10000 10000 10000 10000 10000 10000
Product Domestic Bruto Exclude Oil amp Gas 8885 8946 8941 9168 9223 9197 9136
Source CBS modified by MOI
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
The Role of Manufacturing Sector and Others Economic Sector (Contribution to PDB in )
31 Source Statistical Centre Bureau
(BPS) - 2010
Agriculture livestock Forestry and Fishery
1534
Mining and Excavating 1115
Manufacture Industry 2482
Electricity Gas and Clean Water 078
Construction 1029
Trade Hotel and Restaurant 1372
Transport and Telecommunication
65
Finance Leasing and Service 721
Services 1019
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Source CBS modified by MOI
Contribution of Uindustrial Sector to GDP (2006 ndash Quartal II 2011)
32
NO Econnomic Sector 2006 2007 2008 2009 2010 2011
(Q1) (Q2)
Industry Sector (Exl Olil amp Gas) 2238 2243 2300 2257 2155 2105 2099
1 Food Drinks and Tabaco 637 668 699 749 724 709 729
2 Textile Leather Articles and Footwear 270 237 212 208 193 199 194
3 Wood and Other Forest Products 134 139 148 143 125 120 115
4 Paper and Printing Articles 119 115 105 109 102 099 097
5 Fertilizer Chemical and Rubber Articles 282 280 311 290 274 256 266
6 Cement and Non Metal Excavation 087 083 081 077 071 069 069
7 Basic Metal Iron and Steel 062 058 059 048 042 044 043
8 Transports Machineries and Equipment 627 644 666 617 606 593 570
9 Other Articles 021 019 018 017 016 016 016
GDP 10000 10000 10000 10000 10000 10000 100
GDP (Exl Oli amp Gas 8885 8946 8941 9168 9223 9197 9136
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Growth of GDP Constant Price (2000) for Industrial Sector Year 2005 ndash Quartal II 2011
34
Description 2005 2006 2007 2008 2009 2010 2011
Q1 Q2 Manufacture Industry
Exclude Oil and Gas 586 527 515 405 252 509 578 661
Food Drinks and Tabaco 275 721 505 234 1129 273 404 934
Textile Leather Articles and Footwear 131 123 -368 -364 053 174 1043 803
Wood and Other Forest Products -092 -066 -174 345 -146 -35 -048 301
Paper and Printing Articles 239 209 579 -148 627 164 422 387
Fertilizer Chemical and Rubber Articles 877 448 569 446 151 467 -002 662
Cement and Non Metal Excavation 381 053 34 -149 -063 216 438 566
Basic Metal Iron and Steel -370 473 169 -205 -453 256 1832 1548
Transports Machineries and Equipment 1238 755 973 979 -294 1035 884 441
Other Articles 261 362 -282 -096 313 298 113 621
Economic 569 550 635 601 455 610 647 649
Manufacture Industry Include Oil and Gas 460 459 467 366 211 448 502 609
Source CBS modified by MOI
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
2010
2015
Toward DigitalICT based and environment friendly products
Financial and Management Software Application Animation and Content Industry
Computer industry
Electronic amp ICT Industry Development Target
36
2020
2025
Manufacturing Software Application Animation and Content Industry
DigitalICT based and environment friendly products and component developed
Computer component industry and its supporting industries
Wireless communication products ( Mobile phone 4G Application)
Shopisticated Software Application Animation and Content Industry already
developed
Electronic and ICT Products using nano technology
Local Telecommunication Industry plays significat role in domestic as well as
international market
Domestic Software Application Animation and Content Industry dominate
domestic and regional markets
Domestic wireless telecommunication industry has high competitiveness in
domestic market and global market
Indonesia become production base for consumers electronics and
controlmeasurement devices industry in ASEAN and Asia
Area of Cooperation 1 ICT system for road transportation (Electronic Toll card systemetc)
2 Digital base Electronic Industry
3 Mobile Phone Industry
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Machinery Industry Development Target
37
TURBINE
2010
bull Spread and improvement of agricultural machinery industries outside Java one of the efforts is
establishing center of agricultural machinery
bull Reestablishment of national tooling machine industry although still limited within certain
specification product
bull Establishment Medical Device Industries in Indonesia
bull Realization of turbine manufacturing in power plant as well as industrial purposes
bull Realization of some of the use of machine-made equipment in the country in a
restructuring program sugar mill
2025
bull Increase the human resource capacity to support industrial
machinery equipment
bull Increasing the ability of industrial machinery equipment to fulfill
the needs of machinery equipment
bull Increasing the new investment business expansion and spread
of common equipment machinery industries in Java and outside
Java
bull Increasing the ability of industrial machinery equipment to
produce capital goods
AREA OF COOPERATION
bull Joint Investment of Textile and Sugar Machinery Industry to support restructuring program for Textile and Sugar
Industry (Modernizing production Facility)
bull Joint Investment andor joint operation to build Power Plant to support 10000 MW second stage program
bull Joint Investment to develop supporting Industry (Machinery) for Energy Sector
bull Joint Investment to develop Medical Device (Disposal product)
Power Plant
2015
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
2010
2015
2025
Mid Term Target ( 2010-2014)
Steel Industry Development Target
38
1 Optimalized installed capacity of crude steel industry (60 million tons year)
2 Developed domestic supporting industries workshops
3 Increasing steel consumption from 29 kgcapita in 2004 to 44 kgcapita in 2010
4 Established of information exchange to encourage synergies among the upstream and
downstream national steel industry with associated institutions
Long Term Target ( 2015-2025)
1 The growth of making coal-based iron industry (coal base) which used gas and iron ore
local with capacity of 5 million tons year
2 The growth of pelletizing and pig iron with a capacity of 25 million tons year
3 The development of iron making industry from 15 million tons year to 30 million tons
year
4 The development of crude steel industries from 60 million tons year to 10 million tons
year
5 Integrated steel smelting industry with stainless steel industry (slabs HRC and CRC)
6 The development of steel industry (HRC Plate CRC and long product to 20 million year
7 The increase in steel consumption to 100 kgcapita in 2025
Area of Cooperation
bull Slab and HRC Industry
PT Krakatau POSCO a joint venture between PT Krakatau Steel and POSCO (Pohang Iron and
Steel Corporation) located at Krakatau Industrial Estate Cilegon has been established to produce
slab and HRC with capacity 3000000 MTyear
Plant construction will be done in two phases the first phase the factory will be built with a capacity of
3 million tons which will be completed in 2013 The second phase will be completed two years later
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Steel Industry Family Tree
Available
Not Available
39
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
40
Core Industries Supporting Industries Related Industries
Steel CoalCoke Natural Gas Electricity Water Limestone
CementRefractory Brick IronPellet Scrap Ferro Alloy
Workshop
Transportation Mode Construction Material Automotive
Component Industrial MachineTool Oil and Gas Pipe Casting
Equipment ContainerPackaging
Medium Term Objectives (2010-2014) Long Term Objectives (2015-2025)
1 Optimizing crude steel industry installed capacity (10 million tonyear)
2 Growing pelletizing and pig iron industry by 25 million tonyear capacity
3 Domestic supporting industryworkshop growth
4 Iron making (gas base) industry capacity development from 15 million tonyear to 3 million tonyear
5 Crude steel industry development from 6 million tonyear to 10 millionyear
6 HRC plate CRC and long product production capacity development become 10 million tonyear
7 HRC steel plate plate CRC and long product production capacity development to support shipping industry
oil and gas pipe automotive construction packaging and home appliances
8 Increasing steel consumption per capita from 29 kgyear to 44 kgyear
9 Building information exchange media to boost national steel industry synergy with its upstream and
downstream industry also other related agencies
1Growing coal base or gas base and local iron ore iron making
industry by 5 million tonyear capacity
2Crude Steel industry development become 20 million tonyear
3Building stainless steel smelting industry (slab HRC and CRC) with
local iron ore and nickel base
4Building strong synergy between national steel industry with its
upstream and downstream industry also other related agencies
Strategy
Sector Domestic market utilization as national steel industry development basis local natural resources utilization (iron ore natural gas and coal) to develop domestic supporting
industryworkshop steel base downstream industry integrated development with national steel industry steel industry partnership with other industry including mining industry and research
institution and also college
Technology Boost strategic alliance with technology sources adopt more competitive new technology (from production and product quality point of view)
Primary Medium Term Action Plans (2010-2014) Primary Long Term Action Plans (2015-2025)
1Facilitating partnership between upstream with downstream industry to fulfill upstream industry
raw material requirement
2Increasing steel rolling and its downstream industry installed capacity utilization
3Boosting national steel industry strategic alliance with local resources based technology
4Increasing Indonesian National Standard (SNI) control for steel industry products
5Increasing domestic steel product utilization for infrastructure development (railway bridge
construction) automotive and oil gas pipe
6 Developing CRC Zinc- Aluminum Steel Oil and gas pipe tin plate heavy profile and steel
base building material industry
7Boosting exchange media establishment to boost national steel industry synergy between its
upstream and downstream industry also other related agencies
1Building and developing local coal and iron ore base iron making process technology
by 10 million tonyear capacity together with technology owner Ministry of Energy and
Mineral Resources Ministry of Trade Ministry of Finance Local government and
industry
2Building iron and steel making industry to reach 20 million tonyear steel production
capacity by using proven technology
3Building integrated steel smelting industry (slab HRC and CRC plant) by 600000
capacity with local iron ore and nickel basis from South Kalimantan and South
Sulawesi
4Boosting strong synergy between national steel industry and its upstream and
downstream industry also other related agencies
Supporting Factor
Improvement Technology Period
a Initiation 2004-2009 Adopt new technology pelletizing and iron making plant
bFast Development 2010-2015 New technology utilization for product efficiency and quality
improvement
cFully Developed 2016-2025 Industry and Technology Upgrading
Human Resources
aIncreasing technology and management transfer
bIncreasing research and development role
cPartnership with college to result high skill human resources
Market
aDeveloping foreign market
bIncreasing domestic market share
Infrastruktur
aGiving incentive to new investor and industrial expansion for upstream
steel industry and its supporting industry
bGiving incentive to industry which able for energy consumption efficiency
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Point of Inflection
Point of Saturation
Indonesia
China
Trigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
JapanPoint of InflectionPoint of Inflection
Point of SaturationPoint of Saturation
Indonesia
China
Trigger PointTrigger Point
Singapore Japan
EU
USA
Peak Point
2000-06
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
Per capita in KG
0 100 200 300 400 500 600 700 800
Indonesia
China
USA
Singapore
Australia
EU 15
Japan
41
INDONESIAN STEEL INDUSTRY POSITION
Ministry of Industry
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
42
INDONESIAN IRON ORE MAP
Ministry of Industry
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
1 Up stream and down stream sector of steel industry is still attracting for investment
2 The Government has been offering investors to invest in the steel pellet project to raise the production capacity to 5 million tons a year
3 The Government support the steel industry in maximizing the use of local resources
4 Domestic steel producers were recommended to build new billet and slab steel plant in order to substitute the import products
5 The consumption is driven by oil amp gas sector general structures construction and automotive
43
Future Indonesia Iron amp Steel Industry Prospect
Ministry of Industry
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Shipbuilding Industry Development Target
44
bull Capable to build any kind of ships (commercial
ships passenger ship working ships) up to
50000 dwt
bull National shipbuilding and Engineering Center
(NasDEC)
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 80000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship
working ships) up to 200000 dwt
bull Design and engineering capability
increase
bull Capable to build any kind of ships
(commercial ships passenger ship working
ships) up to 300000 dwt
bull Design and engineering capability increase 2025
2010
2020
2015
Area of Cooperation
bull Exchange employees of shipbuilding companies between Indonesian and Korea to Improve the quality of human resources
bull Join operation of ship design such as basic design contract design and Detail Engineering Drawing (DED) for the ship that built in
Indonesia
bull Join Operation andor Foreign Direct Investment for developing shipyard to produce a good quality of new shipbuilding in Indonesia
bull Join Operation andor Foreign Direct Investment in ship equipment and ship component industry to supply domestic market as well as export
invesment on big size
shipyards
ship equipment and ship
component industry to supply
domestic market as well as export
KKIGK= Shipbuilding Industrial Zone
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
NO Description Product
Exported by Indonesia Indonesias Exports to Korea Share in
Indonesias
Exports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries exported by
Indonesia 876918 8947 26732 8437 305
1 Coconut Palm Oil Manufacturing 172538 1760 1160 366 067 2 Textiles 112055 1143 4415 1393 394 3 Iron Steel Machinery and Automotive 108400 1106 2390 754 220 4 Rubber Manufacturing 95226 972 2993 945 314 5 Electronics 92546 944 3281 1035 354 6 Manufacturing of Copper Tin etc 65060 664 3060 966 470 7 Pulp and Paper 57082 582 3960 1250 694 8 Basic Chemicals 45686 466 2580 814 565 9 Wood Manufacturing 42803 437 1414 446 330 10 Food and Beverage 32286 329 470 148 145
11 Leather Leather Goods and Shoes Footwear
26656 272
597 188 224
12 Electrical tools 26579 271 411 130 155 Other Industries 103233 1053 4954 1563 480
Total of Non Oil amp Gas Industries 980151 10000 31686 10000 323
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
NO Description Product
Imported by Indonesia Indonesias Imports from Korea
Share in
Indonesias
Imports per
product
()
2010
(US$ Million)
Share from Total
Non Oil amp Gas
Industries ()
2010
(US$ Million)
Share from
Total Non Oil amp
Gas Industries
()
Top 12 Non Oil amp Gas Industries imported by
Indonesia 931736 9215 52331 9380 562
1 Iron Steel Machinery and Automotive 432186 4274 16103 2886 373
2 Electronics 141762 1402 10399 1864 734
3 Basic Chemicals 114315 1131 9391 1683 822
4 Textiles 50312 498 9900 1774 1968
5 Food and Beverage 45142 446 482 086 107
6 Electrical tools 31428 311 790 142 251
7 Pulp and Paper 27318 270 929 166 340
8 Other Chemical Goods 21993 218 838 150 381
9 Animal Feed 18716 185 215 038 115
10 Manufacturing of Copper Tin etc 18221 180 2051 368 1126
11 Plastic 15251 151 963 173 632
12 Fertilizer 15092 149 271 048 179
Other Industries 79418 785 3462 620 436
Total of Non Oil amp Gas Industries 1011154 10000 55793 10000 552
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Indonesian exports consisted mainly of palm
oilcoconut Textiles Iron Steel Machinery and Automotive Rubber Manufacturing electronic
goods Manufacturing of Copper Tin etc
while imports comprised Iron Steel Machinery
and Automotive Electronics Basic Chemicals Textiles Food and Beverage Electrical tools
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
520 273 363
617 567 664
0
2000
4000
6000
8000
10000
12000
14000
16000
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Elektronics
China
Singapore
Japan
Hongkong
Korea
India
Malaysia
Others Countrie
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
352 352 336 325 362 373
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Million)
Sh
are
(
)
Year
Iron Steel Machinery and
Automotive
Japan
China
Singapore
USA
Thailand
Germany
Korea
France
Others Countrie
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
1092
874 768
1963 1929 1968
0
1000000
2000000
3000000
4000000
5000000
6000000
0
5
10
15
20
25
30
35
40
2005 2006 2007 2008 2009 2010
To
tal Im
po
rt (U
S$
Th
ousand)
Sh
are
(
)
Year
Total Import Textile by
Indonesia
China
Korea
Hongkong
Taiwan
Japan
Thailand
USA
Others Country
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
16 Companies
(Man Power 37000)
4 Companies
(MP 8000)
5 Companies
(MP 9000)
+ 13000 Outlets
(MP + 65000)
+ 72000 Outlets
(MP + 360000)
TOTAL Man Power = 535000
228 Companies
(MP 57000)
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
116
63
11
Japan
South Korea
China
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
2006
2007
2008
2009
2010
Electronic Demand 2006-2010
( Thousand Unit)
A C
Color TV
Washing Machine
Refrigerator
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
To fulfill the Domestic Demand Oil and Gas Sector
USD 15 Billionyear
Electricity Sector
USD 35 Billionyear
Plant Machinery Sector (Textile and Sugar Industry)
USD 22 Billion in 5 years
Medical Sector
USD 166 Billion in 5 years
Industrial Sector ( Processing Machinery and Machine Tools)
USD 8 Billionyear
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
A number ship component industry already exist but still limited in quantity and production capacity as well as product range such as deck machineries pump valve chain main switch boardetc
About 250 shipyard has already exist absorbed about 45000 labour force engaged in new ship building and ship repairig business Still limited in term of production capacity and capability
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Component Industry ( IC LCD Evaporator and Condenser Photovoltaic )
Home Appliance ( LED TV 3D TV)
ICT and office Equipment ( Mobile phone Photo Copier Computer)
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Static Equipment ( Boilers Pressure Vessels)
Rotary Equipment (Turbine Generator Engine)
Textile Machinery ( Jet loom)
Machine Tools
Medical Device (Disposal Products)
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
New investment and or expansion in order to enhance existing production capacity up to 500000 GTyear ( equals to Rp 57 Trillion)
Investment in ship equipment and ship component industry to supply domestic market as well as export
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Investment opportunities for high technology agro natual resources based industry in Indonesia is still promising
FDI is still expected to invest in electronic and ICT machinery shipbuilding and downstream iron metal amp Steel Idustry sector
We invite Investor and Industry to newly establish or expand its production base in Indonesia to take benefit at expanding domestic market in Indonesia with 240 million people regional market in ASEAN with 590 million people and international market which has already engaged in Trade Agreement with Indonesia
Thank You
Thank You