Antara News·Indonesia·Friday, October 30, 2026 at 10:23 AM UTC

Industry Ministry pushes for comprehensive downstream ecosystem

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Ahmad Muzdaffar Fauzan, Yashinta Difa

Jakarta (ANTARA) - Industry Minister Muhammad Sarmuji called for an expansion of Indonesia’s industrial downstreaming strategy, urging stakeholders to look beyond intermediate manufacturing and focus on cultivating comprehensive domestic ecosystems.

Speaking at the Indonesian Chamber of Commerce and Industry (Kadin) National Conference in Jakarta on Friday, Sarmuji emphasized that extracting raw resources is merely the starting point of a much broader industrialization journey.

"The downstreaming of our natural resources is the starting point of industrialization," Sarmuji stated.

"We will continue to develop this process to produce finished goods and encourage the growth of supporting industries throughout the supply chain,” he added.

According to the ministry, the true measure of industrial success extends past incoming investment metrics. Instead, the government is prioritizing enhanced value addition, advanced technological capabilities, substantial job creation and robust domestic supply chain formation.

Highlighting the trajectory of the nickel sector—which has evolved from raw ore processing into battery components and electric vehicles—Sarmuji noted that such progress generates a powerful multiplier effect, stimulating small and medium-sized industries (SMEs), machinery manufacturing, logistics and professional services.

Building on the success of mineral downstreaming, Jakarta is shifting its focus toward high-potential agricultural and marine commodities to cement the nation's comparative advantage. Key areas of expansion include palm oil, coconuts, marine resources like seaweed and rich biodiversity.

Sarmuji noted that Indonesia's flora—such as pasak bumi (Eurycoma longifolia) and cat's whiskers (Orthosiphon aristatus)—hold immense potential to be processed into homegrown pharmaceutical raw materials.

"One day we will be able to extract our biodiversity into raw materials for medicines, which we are now continuously importing in very large quantities," he remarked.

To protect and energize this emerging industrial baseline, the Industry Ministry continues to lean heavily on the Domestic Component Level (TKDN) policy.

Recent simulations from the Central Statistics Agency (BPS) indicate that every Rp1 spent on domestic products generates an estimated Rp2.2 impact on national economic growth.

Additionally, strategic import substitution valued at Rp400 trillion (approximately US$22.22 billion) holds the potential to accelerate national economic growth by 1.71 percent and yield an additional economic output of Rp627.58 trillion (US$34.87 billion).

To cement these gains, the ministry is actively scaling up structural partnerships between local SMEs and major industrial enterprises, ensuring that smaller businesses are seamlessly integrated into the national manufacturing supply chain.

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