Country Focus
Indonesia rises up to meet growth challenges Indonesia’s rise to become the world’s tenth largest economy, contributing 2.3% of the global economic output, according to the World Bank, has not been easy. Much like its ASEAN neighbours, the country has been riddled with political blizzards and out-dated policies. But current efforts are backing the economy to be one that is globally marketfriendly, says Angelica Buan in this report based on interviews with exhibitors at the recently concluded Indoplas show in Jakarta, Indonesia.
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hedding the economic strategies that were binary to old politics, the more recently reformed government has been more appreciative of the role of the country’s broad consumer base that is buoying up its industries. The industrial sectors, especially manufacturing and mining, contribute largely to the country’s annual GDP growth, which currently is estimated by the Asian Development Bank at 5.7%, to top 6% by 2015. Under manufacturing, Indonesia’s automotive and packaging segments are strong growth performers. At the recent Indoplas show, with Indoprint and Indopack events held simultaneously from 3-6 September in Jakarta, it was clear that the two segments were the target markets for many of the 400 exhibitors from 20 countries. A real-time barometer that the country’s local market is in competitive form in terms of production quality, capacities, and output, the triad events hosted international pavilions, including countries like Germany, Austria, Taiwan and Singapore. According to Singapore-headquartered Messe Düsseldorf Asia (MDA), co-organiser of the event, international firms outnumbered local exhibitors. A 20% increase in the number of first-time exhibitors was also noted this year, with some 25,000 visitors to the four-day event.
Vital market for Germany and Europe According to MDA and its co-organiser, Jakarta-based PT Wahana Kemalaniaga Makmur (Wakeni), there were more German exhibitors this year than the previous show held in 2012. The increase is an indicator that Indonesia has become an important market for the German plastics (and rubber) machinery makers. Claudia Frey, Deputy Managing Director of the German Engineering Federation or VDMA, said that Germany’s highest export volume to Indonesia, exceeding EUR95 million, was in 2012. This was an increase of 65% against the previous year, she told PRA. But Indonesian imports of plastics and rubber machines last year decreased by around 20%. All major suppliers from abroad were hit, according to Frey. However, it is looking better this year. “Based on the latest data published only a few days before the Indoplas event, there was a 59% increase in shipments from Germany to Indonesia for the second quarter of 2014,” added Frey. She went on to say that Germany ranks third among the most important suppliers of plastics and rubber machinery to processors in Indonesia, with a considerable share in overall imports. Indonesia’s increased demand, brought on by rising quality requirements of its growing population, makes the country a favourable market, as well as a supply source of plastics (and rubber) products. Jurgen Rehkopf, Managing Director of Reifenhäuser Singapore, a part of the Germany-based Reifenhäuser Group, said that packaging applications have a substantial market not only in Indonesia but in Asia, too. “The Asian market follows urbanisation and growth in population, which are also suitable factors for increased demand for food packaging.” Frey added, “This is why more German manufacturers – not only from the field of plastics and rubber but also from the printing and packaging industries – work on establishing new contacts with partners in Indonesia and on nurturing existing partnerships.” OCTOBER 2014
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