Foreign Investors Keen on Investing in Indonesia's Food Sector
The food sector is one of the sectors within Indonesia's manufacturing industry that continues to lure foreign investors. This statement is based on the latest report of the Indonesia Investment Coordinating Board (BKPM), the investment services agency of the Indonesian government, released in late December. The agency notes that applications by investors for principle licenses in the food sector in the period 1 January to 28 December 2015 were worth a total of IDR 184.9 trillion (approx. USD $13.5 billion).
Local investors' applications for principle business licenses in Indonesia's food sector totaled IDR 21.2 trillion, while foreign investors' applications were worth IDR 163.7 trillion.
Regarding Indonesia's manufacturing industry in the aforementioned period, investors planned total investments worth IDR 572.3 trillion with foreign investors accounting for about 60 percent (IDR 343.5 trillion) of the total. This means that a large chunk of foreign investment in Indonesia's manufacturing industry goes to the food sector.
The BKPM stated that Indonesia is not merely seen (by foreign investors) as a market for their food products (through trade) but also as a production base. As such, the BKPM believes that Indonesia's food sector can become a major engine within the country's manufacturing industry. The Indonesian Food and Beverage Association (Gapmmi) also believes that the positive trend in the nation's food industry will continue as various foreign investors (from the United States, South Korea and Japan) have shown their interest to tap Indonesia's food and beverage industry.
Foreign interest in Indonesia's food and beverage industry is understandable as the population numbers more than 250 million people (including a rapidly expanding middle class), implying a huge market. Gappmi notes that turnover in Indonesia's food and beverage industry stands at about IDR 1,200 trillion (approx. USD $87.6 billion) in 2015. Last year, turnover in the food and beverage industry was IDR 1.020 trillion, up from IDR 940 billion in the preceding year.