Antara News·Indonesia·Friday, October 30, 2026 at 12:39 PM UTC

Indonesia seeks competitive raw material prices to boost output

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Ahmad, Azis Kurmala

Jakarta (ANTARA) - Industry Minister Muhammad Sarmuji has said that securing adequate supplies of raw materials at competitive prices is essential to increasing national industrial production capacity.

Speaking at the 2026 National Leadership Meeting of the Indonesian Chamber of Commerce and Industry (Kadin) in Jakarta on Friday, he said supply shortages and price disparities remained obstacles for several industrial sectors seeking to maintain production continuity.

"One of the requirements I have highlighted for increasing capacity utilization is a guarantee of adequate raw material supplies," he said.

Sarmuji cited complaints from industry players about a shortage of 15,000 tons of refined sugar needed to meet production requirements through December 2026.

In response, the Ministry of Industry had coordinated with relevant stakeholders to ensure that manufacturers' raw material needs could be met and production could continue uninterrupted.

The vermicelli industry has also faced raw material supply challenges, particularly because of the price gap between domestically produced broken rice and rice traded on international markets.

Broken rice prices on the international market ranged from Rp5,700 to Rp6,000 per kilogram, while the domestic price stood at Rp11,000 per kilogram.

Sarmuji said his ministry had discussed the issue with relevant institutions to find solutions that would allow the industry to use domestically produced broken rice at competitive prices.

He said resolving these supply challenges was necessary to increase national industrial production capacity by optimizing the use of existing manufacturing facilities.

"By addressing these issues, including raw material availability, we can increase capacity utilization across our industrial sectors," he said.

He emphasized that higher utilization of existing production facilities would create greater opportunities for various domestic industries to expand and contribute more to the national economy.

Earlier, Sarmuji said he was targeting an increase in industrial capacity utilization to 80–85 percent from the current 66.13 percent to boost manufacturing's contribution to the national economy.

He said higher capacity utilization offered an opportunity to expand domestic industry, as manufacturing continued to record positive growth despite concerns about deindustrialization.

Non-oil and gas manufacturing grew by 5.32 percent in the second quarter of 2026, exceeding national economic growth of 5.29 percent.

The trend was also evident in 2025, when the manufacturing sector expanded by 5.3 percent, surpassing national economic growth of 5.11 percent.

"The economy is growing, and this is actually the first time in 12 years that the two growth rates have crossed. The industrial sector usually grows slightly below the national economic growth rate. However, since late 2025, industrial growth has exceeded overall economic growth," Sarmuji said.

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