Indonesia Manufacturing Industry: Opportunities for foreign investment

Presented byH.E. Lt. Gen. (Retd.) Andi M. Ghalib

Ambassador of the Republic of Indonesiaat the Seminar on Focus – ASEAN

Mumbai, 7th October 2009

Population: 583 millionGDP: US$1,064 trillionForeign Trade, 2008: US$1,710 tillion

What is ASEAN ?

ASEAN combined GDP is US$ 1.064 trillion, two-way trade of more than that US$ 1.05 trillion, the world’s third largest trading bloc after EU

“ASEAN is moving gradually but progressively towards a shared future!”

ASEAN “ 10 Nations 1 Market “

ASEAN POPULATION

397 14656

228523

576327863

5851

90457

4839

66482 8616

2008 (in thousand)Brunei DarussalamCambodiaIndonesiaLao PDRMalaysiaMyanmarPhilippinesSingaporeThailandVietnam

Economic Situation 2008-2009

Global Economy Average Growth decline 4%World trade decline 40%Intra ASEAN Trade decline 30%ASEAN EconomyGrowth 4,5%Intra ASEAN Investment 14,3%GDP 2008 : US$ 511 millionPPP : US$ 3705

Indonesia’s Economic Performance

- Economic growth : 2007 : 6,7% 2008 : 6,1% 2009 : 4,5%- Improved its world competitiveness

rank (according to World Competitiveness Yearbook 2009 Indonesia is at 42nd)

Indonesia Trade and Economic Cooperation

A. Traditional partners: Japan, India, China and Australla

B. Non Traditional partners:USA, Russia, East Europe, Africa and Latin America

Indonesia Industrial Policy

Vision :

“By 2020 Indonesia becomes an industrialized economy and manufacturing industry will serve as a base“

Indonesia Industrial Development Focus

Industrial Focus

Processing domestic natural

resources

Labour Intensive

Meeting Domestic

Need Export potentials

10 Priority IndustriesFood and beveragesSea productsTextile and textile products

FootwearOil palmWooden productsRubber and rubber goods

Pulp and paperElectrical appliancesPetrochemical

Global Automotive Market

2006

2007

2008

0 5 10 15 20 25

19.89

19.28

16.24

17.08

17.23

15.78

7.18

8.78

9.36000000000001

5.73

5.35

5.08

3.22

3.53

4.97

2.74

3.51

3.7

1.75

1.98

1.98

1.16

1.21

1.23

0.960000000000001

1.04

1.01

0.680000000000001

0.630000000000001

0.610000000000001

0.31

0.43

0.600000000000001

IndonesiaThailandAustraliaKoreaIndiaSouth AmericaEast EuropeJapanChinaWest EuropeNorth America

(x million unit)

ASEAN-6 AUTOMOTIVE MARKET

615.270

29,1%

603.774

28,6%

548.115

25,9%

124.449

5,9%

110.574

5,2%

110.1865,2%

2008

ThailandIndonesiaMalaysiaPhilippinesSingaporeVietnam

Domestic market and forecast data2009-2015

2009 2010 2011 2012 2013 2014 20150

200

400

600

800

1000

1200

450540

650720

820

9501000

350450

520

640720

850920

MaximumMinimum

(x 1000 unit)

Production Data by Category(2006-2008)

Category

Year

2006 2007 2008

Sedan Type

CC <1,5 (G/D)

898 502 2.681

1.5 < CC < 3.0 (G) / 2.5 (D)

1.065 897 2.991

CC> 3.0 (G) / 2.5 (D)

45 171 251

Sub Total 2.008 1.570 5.923

Production Data by Category(2006-2008) Category

Year

2006 2007 2008

4x2 TYPE

CC <1,5 (G/D)

131.817 192.278 285.125

1.5 < CC < 2.5 (G) / 2.5 (D)

65.526 89.427 106.937

2.5 < CC < 3.0 (G)

6.333 20.569 23.935

CC> 3.0 (G) / 2.5 (D)

- - -

Sub Total 203.676 302.334 415.997

Production Data by Category(2006-2008) Category

Year

2006 2007 2008

4 X 4Type

CC <1.5 (G/D)

- - -

1.5 < CC < 3.0 (G) / 2.5 (D)

192 969 5.236

CC> 3.0 (G) / 2.5 (D)

445 4.335 4.267

Sub Total 637 5.304 9.503

Production Data by Category(2006-2008) Category

Year

2006 2007 2008

BUS GVW 5 – 10 Ton (G/D)

831 889 1.788

GVW 10 – 24 Ton (G/D)

423 787 1.168

GVW > 24 Ton (G/D)

- - -

Sub Total 1.254 1.676 2.956

Production Data by Category(2006-2008) Category

Year

2006 2007 2008

PICK UP / TRUCK

GVW < 5 Ton (G/D)

49.964 51.931 84.917

GVW 5 – 10 Ton (G/D)

32.969 40.209 66.120

GVW 10 – 24 Ton (G/D)

3.321 3.070 5.162

GVW > 24 Ton (G/D)

2.171 5.544 10.050

Sub Total 88.433 100.754 166.249

Motorcycle Production, Wholesales Domestic and Exports

2004

2005

2006

2007

2008

3907250

5113487

4458886

4722521

6264265

3898744

5074186

4428274

4688263

6215831

1774

15308

42448

25632

64968

PRODUCTIONWHOLESALEEXPORT

Manufacturing Industries Growth

Paper and pringting

goods (8%)

Transport vehicles,machin

eries and equipments (9,6

%)

Food beverage

s (8%)

Cement & Non metal mines (7%)

Chemical fertilizers &

Rubber products (6,5%)

Iron & Steel

(5,5%)

Growth Projection in 2009