Manufacturing companies in Indonesia have a large labor pool. Then, you may be wondering how they compare to other Southeast Asian alternatives such as Malaysia, Thailand, or Vietnam. Today, we will discuss 3 key areas you have to consider when you evaluate a new manufacturing hub. They include export categories, infrastructure & transportation, as well as labor force. Now, let’s examine the kinds of products Indonesian manufacturing companies make and ship out to other countries around the world. Below, we will focus on discussing those 3 key areas. So, make sure that you read this article carefully!
Manufacturing companies in Indonesia are less mature compared to manufacturing companies in other countries, like China, in many categories. If the government can nurture these categories successfully, they can attract more importers to the Java Island, where about 60% of Indonesia’s population live and work. Remember that after you order for Indonesian-made products, the factory produces them. Then, your containers have to travel a long way before you receive the products. Of course, it relates to infrastructure. Indonesia’s infrastructure is different from other countries’ infrastructures such as China or especially other Southeast Asian countries.
Main Export Categories of Manufacturing Companies in Indonesia
In 2019, manufacturing companies in Indonesia exported 183.5 billion-dollar worth of goods. The top 10 categories included mineral fuels for 39 billion US dollars, animal or vegetable fats, oils & waxes for 13.8 billion dollars, electrical machinery & equipment for 13.3 billion dollars, footwear for 7.4 billion dollars, iron & steel for 7.1 billion dollars, vehicles for 7 billion dollars, precious metals for 6.9 billion dollars, machinery for 6.7 billion dollars, rubber for 6.4 billion dollars, and clothing & accessories for 5.2 billion dollars. Note that the government of Indonesia has plans to push the country into the top 10 economies of the world by 2030.
Manufacturing Companies in Indonesia: Infrastructure and Transportation Network
Based on the 2019 Global Competitive Report of the World Economic Forum, Indonesia ranked 72 out of 141 for infrastructure. Meanwhile, Malaysia, Thailand, Vietnam ranked 29, 53, and 66 respectively. Then, China ranked 36. The relative lack of infrastructure cause difficulties in getting things to ports. However, the government seems to be taking the development of infrastructure seriously. Some even criticized the government for the obsessive focus on this sector but no focusing on making it easier to do business. Anyway, infrastructure and transportations belong to the biggest industries in manufacturing companies in Indonesia.
Manufacturing Companies in Indonesia: Labor Force
Due to its high population, the labor force of Indonesia is also large. Like other Asian countries, Indonesia has rising wages. However, it is still lower compared to China and other countries in Asia. So, can you find good manufacturing companies in Indonesia? generally, finding new manufacturing companies is very challenging. We all know that Indonesia has been improving its infrastructure as well as investing heavily to make its manufacturing sector much more attractive. Of course, this will offer good opportunities for the proper importers from any other country in the world.
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