Antara News·Indonesia·Wednesday, September 23, 2026 at 11:01 AM

Minister discusses industry challenges, solutions at ABF 2026

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Ahmad Muzadaffar, Resinta Sulistiyandari

Jakarta (ANTARA) - Minister of Industry Agus Gumiwang Kartasasmita outlined various pressures facing the national industry, as well as the government's strategies to maintain the manufacturing sector's competitiveness amidst a challenging global economic landscape.

Speaking at the ANTARA Business Forum (ABF) 2026 in Jakarta on Wednesday, he mentioned that the pressure on the industry is reflected in Indonesia’s Manufacturing Purchasing Managers’ Index (PMI), which stood at 49.8 in August 2026, slightly below the 50-point expansion threshold.

However, he emphasized the importance of considering the situation alongside the Ministry of Industry's Industrial Confidence Index (IKI). The index reached 52.3 in August, remaining in the expansion zone and above 50 throughout the first eight months of 2026.

According to Kartasasmita, the gap between the two indicators shows that industry players remain confident about business prospects while also facing real challenges in the field.

He noted that the PMI captures fluctuations more quickly, as it measures companies' purchasing and order conditions for the current month, while the IKI covers a broader range of companies and places greater emphasis on new orders.

The minister then identified at least four major pressures currently weighing on the national industry, namely a flood of imports, geopolitical tensions, rising oil prices, and consumer purchasing power.

He explained the surge in imports is occurring amidst global production overcapacity, particularly in the steel, textile, ceramic, plastic, and electronics sectors.

Kartasasmita acknowledged that this situation places further strain on domestic industries, as many imported products enter the market at very low prices. Price competition has become increasingly difficult for domestic producers, who must shoulder production and operational costs.

The next source of pressure is geopolitical in nature, specifically the conflict between the United States and Iran and disruptions in the Strait of Hormuz, which affect global energy supply routes.

Rising oil prices also pose a challenge, as they directly affect costs related to fuel, logistics, and petrochemical raw materials such as plastics, synthetic rubber, and polyester fibers, he continued.

Kartasasmita said the four sources of pressure are interconnected. Rising energy costs are driving up production expenses, while cheap imports are putting pressure on product prices and weak purchasing power is weighing on demand.

"We have conducted an assessment and found that the challenge facing our industry is not a lack of production capacity, but ensuring that the goods we produce are absorbed by the domestic market," he pointed out.

To address these challenges, the government is implementing the New National Industrialization Strategy (SBIN), adopted during the Ministry of Industry's working meeting on October 27, 2025.

The SBIN rests on four pillars: natural resource-based industrialization, industrial ecosystem development, technological mastery, and sustainability principles.

Natural resource-based industrialization aims to increase the value-added of commodities such as nickel, palm oil, coal, and other key commodities.

Meanwhile, industrial ecosystem development involves integrating upstream and downstream sectors, supported by a competent workforce and adequate infrastructure.

On the technology side, the government is promoting modernization and innovation to boost productivity and competitiveness. Sustainability also serves as a foundation through the development of green industries and the circular economy.

"The SBIN is a national strategy to ensure that Indonesia's industry not only survives but also grows and achieves industrial sovereignty by building a resilient, competitive, and sustainable sector," Kartasasmita said.

He added that industrial growth of 5.32 percent indicates the industrialization policy is moving in the desired direction.

However, amid growing global pressures, the implementation of the SBIN needs to be strengthened through three key measures: protecting the domestic market, reducing costs, and improving productivity.

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