Indonesia Poised to Become Global Manufacturing Hub

With a strong economic foundation, Indonesia is emerging as a hub for large-scale manufacturing.

Fatkhul Maskur

6 Jun 2024 - 18.05
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Indonesia Poised to Become Global Manufacturing Hub

Illustration - Activities at a car factory. In 2023, Indonesia experienced an increase in foreign direct investment (FDI) in the manufacturing sector, with an increase of US$4 billion, reaching a total of US$28.7 billion./Bisnis.

Bisnis, JAKARTA—Global real estate and investment management firm JLL noted in its report “Beyond China: Asia’s Next Manufacturing Powerhouse” that Indonesia is a significant beneficiary of companies diversifying their manufacturing to complement their production base in China.

According to the report, many companies are exploring relocating their manufacturing out of China. In the Asia-Pacific region, the near/re/friend shoring trend has resulted in the China+1 strategy, where companies add additional manufacturing bases outside China to prevent supply chain disruptions by reducing dependency on a single country.

The impacts of such strategies have been more prominent in destination countries in Southeast Asia and India. Jurisdictions in these regions welcome this opportunity and implement more policies to support their local manufacturing industries by prioritizing land availability and access to capital.

"Diversification within supply chains is a natural step for companies involved in manufacturing within the wider economic lifecycle of this region," said Michael Ignatiadis, Head of Manufacturing Strategy at JLL Asia Pacific.

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© Copyright 2024, Hak Cipta Dilindungi Undang - Undang.