Indonesia Unfortunately Still Depends on Imports of Industrial Raw Materials

Industrial Raw Materials

Indonesia is reported to still depend on imports of industrial raw materials and auxiliary capital goods. This was regretted by the Coordinating Minister for the Economy Airlangga Hartarto.

Airlangga said that the total import of raw or auxiliary materials reached 75 percent of total shipments to the country, and 16 percent of capital goods. Thus raw material imports reached 91.35 percent of Indonesia’s total imports in January 2023.

“It should be noted that Indonesia is still dependent on imports of industrial raw materials or auxiliary materials,” he explained in a Scientific Speech commemorating the 77th Engineering Education Day at Gadjah Mada University online, Friday (17/2/2023).

Then, based on a report from the Central Statistics Agency (BPS), the value of imports by use in January 2023 reached US$18.44 billion, of which US$13.89 billion or around Rp.212 trillion (exchange rate of Rp. 15,267 per US dollar) included 75. 30 percent is an import of raw/auxiliary materials.

According to the data above, capital goods contributed US$2.96 billion, up 5.66 percent compared to the same period in the previous year (year-on-year/yoy).

On an annual basis, the import value of January 2023 saw an increase in the category of capital goods US$158.5 million (5.66 percent), raw/auxiliary materials US$56.3 million (0.41 percent), and consumer goods US$17.1 million ( 1.09 percent).

imports for the 2-digit HS goods category of electrical machinery and equipment and their parts (HS 85) experienced the highest increase, reaching US$215.6 million in January 2023.

For this reason, Airlangga asked the academic community to deepen the structure of the machinery industry in an effort to reduce the need for imports.

“We have mastered the palm oil sector and its derivatives from upstream to downstream, but the capital goods are still imported. This is a challenge for engineering faculties to deepen the structure of the machinery industry in the agro sector,” he said.