The chemical, pharmaceutical and textile industries (IKFT) continue to make a significant contribution to national economic growth. In Q1 2023, the IKFT sector contributed 3.88 percent of national gross domestic product (GDP).
“IKFT sector exports throughout 2022 reached USD 53.97 billion, up from USD 49.21 billion in 2021,” the Acting Director General of IKFT at the Ministry of Industry, Ignatius Warsito, said in Balikpapan, East Kalimantan, on Wednesday (14/6). The leading export sectors include chemicals and chemical products at USD 21.41 billion and apparel at USD 9.69 billion.
In Q1 2023, the largest IKFT shipments came from chemicals and chemical products at USD 4.28 billion, followed by apparel (USD 2.03 billion), leather and footwear (USD 1.94 billion), rubber and plastic goods (USD 1.68 billion), textiles (USD 934.72 million), non-metallic minerals (USD 306 million), and pharmaceuticals and traditional medicines (USD 175 million). Total IKFT exports in the first three months of the year exceeded USD 11.35 billion.
Meanwhile, Warsito said investment performance in the IKFT sector is trending upward. In 2022, realized investment reached IDR 106.12 trillion, up significantly from IDR 66.50 trillion in 2021. “Up to Q1-2023, IKFT investment reached IDR 33.78 trillion, dominated by chemicals and chemical products at IDR 16.29 trillion, followed by rubber, rubber goods and plastics at IDR 4.50 trillion,” he said.
Warsito added that the IKFT sector's positive performance also helped keep the Industrial Confidence Index (IKI) in the expansion phase. “IKI in May 2023 was still at an expansion level of 50.90,” he said.
IKI is a perception index calculated from three variables: orders, production and inventory. An index above 50 indicates industrial conditions that are expanding or optimistic, while an index below 50 indicates contraction.
“Amid today's global economic uncertainty, Kemenperin sees the need to monitor the condition of industry, the main pillar of the national economy,” he added. Kemenperin therefore seeks accurate, complete and up-to-date information on Indonesia's manufacturing sector, including through the IKI survey.
The Director of Textile, Leather and Footwear Industries at Kemenperin, Adie Rochmanto Pandiangan, said the textile and textile products (TPT) industry is one of the non-oil and gas manufacturing groups categorized as strategic and a national priority under the National Industrial Development Master Plan (RIPIN).
“Although affected by global market uncertainty in the United States and Europe, confidence in the future of the textile industry remains very high,” he said. Investment in the TPT industry more than doubled, from IDR 3.85 trillion in Q1-2022 to IDR 7.8 trillion in Q1-2023.
Meanwhile, the Indonesian Ceramic Industry Association (Asaki) projects that its members' capacity expansion of 75 million square meters is on track, in North Sumatra, South Sulawesi and Java. The ceramic industry will also come to Central Java with two new factories in Kendal and Batang.
“This will even out the supply of ceramics, which has so far been served by ceramic industries mostly located in western and eastern Java,” said Asaki General Chair Edy Suyanto.
Edy projects the total capacity addition of 75 million m2 will be completed by the end of 2024, equivalent to 102% of annual ceramic imports. “With this capacity, the ceramic industry will absorb up to 10,000 new workers, making Indonesia the world's fourth-largest ceramic producer after China, India and Brazil,” he said.
Kemenperin also welcomed the start of operations of a new PT Nippon Shokubai Indonesia factory producing Acrylic Acid and Acrylic Esters, intermediate chemicals with very wide uses, including as raw materials for emulsions, polymers and resins, acrylic fiber and polyolefin copolymers.
The investment shows the great potential for developing the intermediate chemical industry. With an additional Acrylic Acid capacity of 100,000 tons per year, PT Nippon Shokubai Indonesia's total Acrylic Acid capacity rises to 240,000 tons per year. This added capacity helps secure domestic supply in anticipation of rising domestic demand for Acrylic Acid, while also adding export market potential.
Source: Press Release of the Ministry of Industry