According to the Indonesian Food and Beverage Producers Association (GAPMMI), only 5 percent of all food and beverages produced in the country were exported in 2018, half of the initial target of 10 percent.

Food and beverage exports hit US$29.9 billion in 2018, down 9.5 percent from $31.8 billion seen in 2017, data from Industry Ministry show.

The main reason behind the sector’s small contribution to exports was because producers had to meet a lot of requirements and standards in the destination countries, said GAPMMI chairman Adhi S. Lukman during a recent event held by publicly listed food manufacturer Mayora in Tangerang, Banten.

In addition to complex requirements, Adhi said, food and beverage products also faced high import duties in several countries. For instance, the import duty for Indonesian-made food products could be as high as 30 percent in some African countries.

“There are actually a lot of smaller countries out there that could become our new export destinations, but we’re hampered by their high tariffs [...] whereas traditional markets, such as the United States and China, are highly competitive, so our presence is not big in those countries,” he said.

Therefore, the association is urging the government to negotiate with Indonesia’s trade partners in terms of tariff standards and inspections.

“Trade missions are also important in order to enable us to secure access to new markets,” he said.

The Industry Ministry has the food and beverage sector listed as one of its five priority industries, along with textiles and garments, chemicals, electronics and the automotive industry. In the past couple of years, the food and beverage sector booked growth of around 8 to 9 percent.

On the same occasion, President Joko “Jokowi” Widodo promised that his administration would provide the food and beverage sector with more support to further spur growth and exports.

“I reaffirm my commitment that the government wants to rapidly enhance exports and investments [...] I encourage more partnerships and collaboration between the government and the private sector so that we can realize better growth,” Jokowi said.

Also on the same event, Mayora president director Andre Sukendra Atmadja said his company was committed to boosting its overseas sales as it was one of the few Indonesian manufacturers that saw success in food and beverage exports.

In the past decade, Mayora had exported to more than 100 countries, with exports making up half of the company’s revenue of Rp 35 trillion ($2.49 billion) in 2018, Andre said.

Aside from boosting exports, Mayora is slated to build a factory this year in the Philippines, one of its top export destinations. Its exports to the Philippines totaled more than $600 million in 2018, more than 10 percent of the $5.8 billion in overall exports to the neighboring country.

“We plan to invest around $50 to $75 million to build this Philippines factory,” he said during the event. “This plan comes from a request from the Philippines for Indonesia to invest [in the country] in return for its removal of trade barriers for our products.”

The company would begin constructing the plant in the fourth quarter of 2019, along with the 70th commemoration of Indonesia-Philippines bilateral relations, he added.

This year, he said, Mayora was planning to expand to the African market, pointing to the fact that the continent was home to over 400 million middle-class citizens that could comprise the core of an ideal consumer base.

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