Indonesia Emerges as Key Destination for Manufacturing Sector Investments at Hannover Messe 2023 Conference

INTI,- Investment realization in Indonesia has grown 1.6 times from 2018 to 2022, with the manufacturing sector showing even higher growth at 2.1 times, making Indonesia one of the top 20 destinations for investment in the world. Indonesia has prepared suitable industrial areas according to the needs of investors with over 100 Industrial Estates scattered across Java and outside Java. The Industrial Estates in Java are intended for high-tech and digital-based industries, labor-intensive industries, and downstream industries, while those outside Java are intended for industries aimed at increasing the value of natural resource-based products and triggering new economic development.

To support the implementation of the fourth industrial revolution, Indonesia has developed smart-eco industrial parks equipped with high-tech digital infrastructure that is environmentally friendly. Indonesia is also ready for a circular economy system, digital hub, and others.

Schneider Electric Indonesia's Cluster President for Indonesia and Timor-Leste, Roberto Rossi, said that Schneider's mission is to be a digital partner for industrial players for sustainability and efficiency. Schneider, a global industrial electrical device company, always supports and empowers human resources to maximize energy utilization while bridging progress and sustainability for the future. Schneider has two of the largest factories in Indonesia, in Batam and Cikarang, employing 3,800 workers. The company is also active in corporate social responsibility activities and sustainable impact programs, including the teacher mission, which involves teaching vocational schools to ensure the skills needed by industries, community service programs around company locations, and tree planting programs to support environmental sustainability.

The CEO of PT Vale Indonesia Tbk, Febriany Eddy, also spoke at the conference, stating that one of the strong reasons why Indonesia is the right country for investment is because of its abundant natural resources. Indonesia is the country with the largest nickel resources in the world. The trend of energy transition encourages industries to innovate in utilizing mineral resources as raw materials. Vale Indonesia has a total investment of USD 6.8 million, producing 3% of the world's nickel demand and employing 3,000 workers, 99% of whom are local Indonesian workers.

Indonesia is the fourth-largest country in the world by population, which is one of its advantages because it can provide adequate labor for global companies. This is supported by the fact that Indonesia also has a demographic bonus, with an average worker age of 30 years. This is different from other countries that have older workers, making it difficult to obtain labor, according to Nurul Ichwan, Deputy of Investment Promotion at the Ministry of Investment. In ASEAN, Indonesia is the largest country in terms of both population and economy. Indonesia is a production base for the international market, contributing 36% to the total GDP of ASEAN. Indonesia is also a member of the G20, with economic resilience and growth, with a GDP of USD 1.3 trillion and a per capita GDP exceeding USD 5,000. Based on Bloomberg data (April 2023), Indonesia is also predicted to withstand the possibility of a future recession, with the lowest probability of recession in the future compared to other countries.

In addition to these advantages, Indonesia has also implemented various measures to improve the ease of doing business in the country. According to the World Bank's Doing Business 2022 report, Indonesia has jumped 19 spots to rank 92nd out of 190 countries, marking the country's highest ranking since the report was first published in 2003. The government has been actively implementing reforms to streamline business registration processes, simplify tax procedures, and strengthen legal protections for investors.

The conference was held as part of the Hannover Messe 2023, one of the world's largest trade fairs for industrial technology, which was held in Hannover, Germany from April 17 to 21. The Indonesian Pavilion, which showcased the country's industrial and technological capabilities, was one of the main attractions at the fair.

The conference was attended by representatives from various Indonesian government agencies, as well as business leaders and investors from around the world. It provided a platform for Indonesian companies to showcase their products and services, as well as to network with potential investors and partners.

The strong growth in investment in Indonesia's manufacturing sector is a positive sign for the country's economic development, and highlights the potential for Indonesia to become a major player in the global industrial landscape. With its abundant natural resources, young and growing population, and favorable business environment, Indonesia is well positioned to attract more investment and continue its economic growth trajectory in the years to come.***Hans