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RI lacks investment to continue downstream: Ministry
The government acknowledged that the country’s downstream industry is lacking depth, with processed goods often sold at or near their raw form, citing the necessity for additional investment to continue further down the line.
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The government said it requires further investment to develop the country’s further downstream industry, particularly in commodities outside critical minerals. The country would need US$300 million in investment to turn silica into metallurgical grade silicon, according to the Industry Ministry. (Antara/Muhammad Iqbal)
T
he government acknowledges that the country’s downstream industry is lacking depth, with processed goods often sold at or near their raw form, citing the necessity for additional investment to continue further down the line.
Previously, experts questioned the benefits of the government’s downstream nickel policy, claiming that it only resulted in a slightly higher value before being shipped abroad, and therefore benefits the receiving country more than Indonesia.
The Industry Ministry told reporters on Monday that the country was still facing difficulties in processing other commodities further downstream, citing challenges ranging from a lack of investment to poor infrastructure.
“The rubber downstream industry to create tires has been running generally well […] however, there are a few types [of tires] that cannot be produced because of a lack of investment,” said Saiful Bahri, the ministry’s director of downstream chemical and pharmaceutical industries, in a media discussion on Monday in Jakarta.
While there is potential for downstream activities in the rubber sector, he added that insufficient infrastructure could hinder efforts to expand these activities, including the lack of a push to increase the use of local components (TKDN).
Data from the Investment Ministry showed that investments in the manufacturing sector constituted 39.8 percent of the Rp 678.7 trillion investment realization in the country during the first half of this year.
However, the Industry Ministry reported that investments were still inadequate to create an extended downstream supply chain.
