Indonesia's eastern regions outpace national manufacturing growth

Despite the strong growth, industrial output remains geographically concentrated,

Jakarta (ANTARA) - The Industry Ministry has reported strong growth in industrial development across Eastern Sub-Region II, comprising North Maluku, Southeast Sulawesi, North Sulawesi, and West Papua, driven largely by downstream processing of mineral and other natural resources.

According to ministry data, the manufacturing sector across the four provinces more than doubled between 2021 and 2025, rising from Rp64.61 trillion (approximately US$3.55 billion) to Rp149.41 trillion (US$8.21 billion).

In real terms, the region's manufacturing sector grew at an average annual rate of 18.21 percent, significantly outpacing the national average of 5.17 percent.

Industry Minister Muhammad Sarmuji said on Thursday that regional industrial progress should be measured by its ability to create jobs, increase domestic value-added production, and improve public welfare.

"The development of the national industrial sector is measured not only by increased investment and the number of industrial enterprises, but also by its capacity to generate domestic value-added, expand employment opportunities, strengthen local businesses, and improve public welfare," Sarmuji said in a statement.

In 2025, North Maluku led regional manufacturing growth with an increase of 62.64 percent, the second-highest rate nationwide after West Nusa Tenggara.

Southeast Sulawesi followed with growth of 14.91 percent, ranking fifth nationally, while North Sulawesi and West Papua recorded increases of 9.97 percent and 9.04 percent, ranking ninth and eleventh, respectively.

Despite the strong growth, industrial output remains geographically concentrated, particularly in Central and South Halmahera in North Maluku, Bintuni Bay in West Papua, and Konawe in Southeast Sulawesi.

Meanwhile, North Sulawesi has a more diversified industrial base, supported by agricultural and fishery processing industries centered in Bitung.

Combined, the four provinces accounted for relatively small shares of national manufacturing output in 2025, with North Maluku contributing 1.01 percent, West Papua 0.59 percent, North Sulawesi 0.41 percent, and Southeast Sulawesi 0.38 percent.

To ensure that industrialization benefits more local communities, the ministry's Director General of Industrial Resilience, Regional Development and International Industrial Access (KPAII), Tri Supondy, stressed the importance of integrating rural communities, small and medium industries (SMIs), cooperatives, and local suppliers into broader industrial ecosystems.

Tri highlighted village-level integration models, including processing locally sourced commodities such as coconuts into food products, coconut oil, coconut shell-based products, and handicrafts made from coconut fiber.

He also pointed to the development of cooperative clusters involving several villages.

Expanding partnerships with large-scale industries is another priority.

Cooperation between the Industry Ministry and the Indonesian Chamber of Commerce and Industry (Kadin) has resulted in 36 partnerships connecting 32 small automotive component manufacturers with 16 tier-1 companies.

By mid-2024, the partnerships had generated purchase orders worth Rp110.45 billion (US$6.07 million), equivalent to 105 percent of the target.

Related news: October manufacturing PMI reflects robust industrial growth: Sarmuji

Translator: Ahmad Muzdaffar Fauzan, Yashinta Difa
Editor: M Razi Rahman
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