Reasons Why the Indonesian Food Industry Remains Resilient

High Growth Potential in Supply Chain and Labor Force... 22% of Total Manufacturing Investment

[Asia Economy Jakarta Correspondent Choi Sujin] In the first quarter of this year, investment in Indonesia's food industry exceeded one-fifth of the country's total manufacturing investment. This is due to the excellent competitiveness of raw material supply chains and labor force.

According to local media on the 2nd, the Indonesia Investment Coordinating Board (BKPM) announced that investment in the food industry reached 293.2 trillion rupiah (approximately 20 billion USD) in the first quarter of this year. This accounts for 22% of the total manufacturing investment of 91.4 billion USD. This figure was higher than investments in the metal, chemical, and pharmaceutical industries. The food industry investment growth rate recorded an average annual increase of 3% over the past five years, and BKPM added that the investment scale in the second quarter of this year is expected to be the highest across all industries. Para Indriani, Head of the Investment Environment Division at BKPM, stated, "Indonesia's food industry has maintained a stable level despite the global economic crisis," adding, "Domestic investment has had a significant impact."

Investment in Indonesia's food industry is attracting attention due to its high growth potential. Investors recognize the diverse raw material supply chains and abundant labor force. Indonesia's food industry is mainly concentrated in the eastern and western parts of Java Island, where global food companies such as Nestl? and Unilever have established operations.

Market research consulting firm Euromonitor International forecasted that Indonesia's food and beverage industry is attractive and shows continuous growth. Indonesian consumers are enthusiastic about new menus, indicating unlimited potential in the food service sector. Euromonitor added that the linkage between fintech businesses and the food industry, as well as the development of online delivery services, are factors supporting the competitiveness of the food industry. In this regard, Indonesia's leading electronic payment platforms, GoPay and OVO, saw transaction volumes grow by 173% last month compared to the same period last year. Delivery apps such as Grab and Gojek recorded transaction volume increases of over 30%. Delivery has played a significant role in the growth of the food industry.

Meanwhile, according to BKPM, investment in the manufacturing sector has reached 1,300 trillion rupiah from the first quarter of 2015 to the first quarter of this year. Para, Head of the Investment Environment Division, said, "Indonesia serves as a geopolitical hub for the manufacturing sector in the ASEAN region."

This content was produced with the assistance of AI translation services.