Jayanty Nada Shofa, Jakarta – Indonesia would need a total of $545.3 billion in investment until 2040 to develop downstream industries across 8 priority sectors, including minerals and forestry, according to a government roadmap.
Indonesia has had enough of exporting raw materials. The Southeast Asian country is now working towards industrial downstream in which it processes its raw materials into products of higher value. But this plan does not come cheap.
An Investment Ministry roadmap shows that Indonesia's ambitious downstream project would require an investment of $545.3 billion over the next decades.
About $431.8 billion in investment needs come from the minerals and coal sectors. The industrial downstream for commodities under the oil and natural gas sectors will need $68.1 billion. The roadmap revealed that investment needs in plantation, marine, fisheries, and forestry sectors total $45.4 billion.
The above eight priority sectors encompass 21 commodities ranging from nickel, tin, and rubber to palm oil.
According to Heldy Satrya Putera, the deputy for strategic downstream investment, Indonesia has not properly taken advantage of its abundant natural resources.
For example, Indonesia is home to the world's second-largest tin reserves, totaling 2.2 million tons. Although Indonesia is the leading exporter of tin ingot ($2.42 billion), it is not in the top five for other tin-derived products.
"Indonesia may rank second in tin reserves. But we still haven't even cracked the top five as [an exporter of] derivatives [aside from tin ingots]," Heldy said in an industrial downstream conference hosted by Investor Daily and the Investment Ministry on Wednesday.
"Thailand and China import their tin ores, but Thailand is already an industry player for tin solder. China is in first place in PCB [printed circuit boards] exports. This is something we need to pay attention to," Heldy said.
The Investment Ministry revealed that Thailand's tin solder exports ranked third globally, reaching $53.12 million in total value.
China imports $1.33 billion worth of tin ores – the largest globally. China, however, exports $20.83 billion in PCBs.
Heldy told the forum that Indonesia was still falling behind in palm oil-derived product exports.
Indonesia is the largest crude palm oil (CPO) producing nation, with production reaching 49.7 million tons. It exports 2.49 million tons of CPO, placing second globally after Malaysia. But Indonesia is the fifth biggest importer of carotene, spending $31.3 million to buy the ole food product.
"We are only leading in CPO exports, but we also have not entered the top five for carotene. Developing the oleofood and oleochemical industries is something that we will work on," Heldy said.
Indonesia aims to attract Rp 1,400 trillion (around $92.8 million) in total investment this year.