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Jakarta Post

Government to ease import procedures as manufacturers look beyond China for sources of raw materials

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, March 3, 2020   /   06:17 pm
Government to ease import procedures as manufacturers look beyond China for sources of raw materials Workers operate sewing machines at a garment factory in Bogor, West Java, in September 2018. The government plans to ease licensing procedures for importing raw materials to help local manufacturers, including garment producers, cope with the disruption to the supply chain caused by the coronavirus outbreak. (Antara/Yulius Satria Wijaya)

The government plans to ease licensing procedures for importing raw materials as the country’s manufacturing industry begins to feel the impact of the disruption to the supply chain from China caused by the coronavirus outbreak.

Finance Minister Sri Mulyani Indrawati said in Jakarta on Monday that simplifying import procedures for raw materials would be one of the strategic measures taken to cope with the impact of the Covid-19 outbreak on the manufacturing sector.

The minister said 500 companies were being considered to receive special permits to allow them to import raw materials from sources other than China.

According to data from the state treasurer, the raw materials imported by the 500 companies accounted for 40 percent of the country’s total raw material imports.

The coronavirus outbreak in China has hit global supply chains hard and has spurred countries to look for other sources of raw materials. The disruption to the supply of raw materials from China has also severely hurt Indonesian manufacturing companies, especially those involved in plastics, textiles and chemical production.

“The disruption to the supply of raw materials from China, especially for plastic, textile, footwear, steel and chemical products, has severely hurt local industries.” Sri Mulyani said, adding that for many companies, between 20 to 50 percent of their raw materials were imported from China. (hen)