Transcript Indonesia – a country of contrasts

EU – Indonesia
Business Network:
“Your Gateway to Indonesia”
4th
World’s Most
Populous Country
2nd fastest growing
Member State
after China
G20
250
17,508islands
million
Population (in 2013)
10
th
World’s Largest Economy
Biggest Archipelagic Nation
1
trillion
USD GDP (PPP)
IND ONESIA
4,876
USD GDP
per capita (PPP)
Agenda
Market Potential
Indonesia
• Reasons to look into the Indonesian market
Challenges
Indonesian market
• Obstacles in the Indonesia the market
EU-Indonesia
Business Network
• Your partner for overcoming these obstacles
Sector outlooks
• Overview and examples of promising sectors
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
1. Market Potential Indonesia
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
1.a. Macroeconomic data
Sustained GDP growth
 5.1 % GDP Growth in 2014
 Sustained high growth rates
Market Potential
 Stable inflation rates
 250 million inhabitants
 10th largest economy in the world
EU-Indonesia Business Network
Challenges
Sectors
1.a. Macroeconomic data (II)
Stable macroeconomic environment
BBBOutlook: Stable
Baa3
Outlook: Stable
BB+
Outlook: Stable
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
1.a. Macroeconomic data (III)
Large domestic consumption base…
Structure Indonesian Economy (% of total GDP)
Export of
goods and
services
19%
Household
Consumption
Expenditure
46%
Changes in
Inventories
2%
Government
Final
Consumption
Expenditure
7%
Gross
Domestic
Fixed Capital
Formation
26%
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
Large domestic
consumer base
=
Locomotive and
guarantor of
GDP growth
1.a. Macroeconomic data (IV)
… that will grow even further
300
Population development prediction (in million
inhabitants)
250
135 million people
200
150
100
Consuming class
50
Below Consuming
class
0
2010
2020
Market Potential
2030
EU-Indonesia Business Network
Challenges
Sectors
Consuming class
defined as persons
with a real net
monthly income of
US$ 300 or above
1.b. Economic activity by region
1.c. Political environment
Stable political environment
• Since 1998 thriving and
stable democracy
• Newly elected President:
Joko Widodo (former
governor of Jakarta)
Market Potential
Joko Widodo
Dr Susilo Bambang Yudhoyono
Governor of Jakarta 2012 – 2014 President 2004-2014
Presidential candidate 2014
EU-Indonesia Business Network
Challenges
Sectors
1.c. Political environment (II)
Indonesia international
• Political & economic key player
regionally and globally
• Free trade agreements with:
– ASEAN
– Japan
– China
– Soth Korea
• Member of international
organizations
• Founding member and biggest
economy of ASEAN
Market Potential
Association of Southeast
Asian Nations
• Political & economic
organization
• 10 Member states
• 600 million inhabitants
EU-Indonesia Business Network
Challenges
Sectors
Sustained growth rates
Macroeconomic and
politically stable
environment
Indonesia
Large & growing
domestic consumption
base
Market Potential
Key member
ASEAN
EU-Indonesia Business Network
Challenges
Sectors
2. Challenges in the Indonesia
Market
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
Market access restrictions
• Numerous protectionist laws in place
• Obtaining licenses can still be cumbersome
Legal uncertainties
• Unclear and incoherent laws
• Overlapping ministerial responsibilities
• Insufficient IPR protection
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
Poor infrastructure
• Bottlenecks & high costs of transport of goods and people
• Economic Master plan 2011-2025 to tackle infrastructure
shortcomings
Corruption
• Notorious, especially in public tenders
• Political initiatives (e.g. KPK) are improving situation
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
Market access
restrictions &
excessive bureaucracy
Legal Uncertainty &
insufficient IPR
protection
Challenges
Poor infrastructure
Market Potential
Corruption
EU-Indonesia Business Network
Challenges
Sectors
Challenges &
difficulties to unleash
this potential
Large market
potential
Partner on the ground with expertise of the
country advised
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
3. Sector Potential
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
Sector Outlook
Engineering
Automobile
Chemistry
Construction &
Infrastructure
Electronics
Information technology
Environmental and
sustainable technology
Mining
Healthcare sector
Energy
Food and beverage
Sector overview
•Growing economy
•Large domestic market with expanding
consuming class
•Catch up
 demand for consumer goods
 demand for production machines of
consumer goods
•Investments in infrastructure through
Economic Master plan
(1) Food and beverage
In 2013 the Food & Beverage sector recorded a growth of 8.2% contributing
7.42% to the country's GDP
The sector is expected to keep on rising in the coming years , mainly due to
rising incomes and increased spending on food by the growing middle class
The food consumption growth in 2014 amounted 7,5% and is forecasted to
grow 6,9% for 2017.
For alcoholic drinks, the growth amounted 11,7% in 2014 and is forecasted to
grow 8,4% in 2017.
Soft drinks value sales’ growth in 2014 increased by 9,5% and by are expected to
increase by 8,8% in 2017.
The mass grocery retail value sales’ growth amounted to 11,7% in 2014 and is
expected to amount 10,0% in 2017.
Highest business potential: halal products, branded and specialty food
products, food processing machinery, supply of food ingredients and packaging
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
(2) Healthcare
 Indonesians spending on healthcare is expected to grow close to 14%
 By 2019, an estimated 240-260 million Indonesians will be covered by newly
implemented National Health Insurance program
The National Health Insurance program will generate demand in a new population
group, by providing access amongst those that never could have afforded it before,
driving an increasing demand for clinics, hospitals and clinicians.
Public hospitals alone will not be able to achieve the demand, therefore major
private hospital groups are already expanding to address the gap in the healthcare
infrastructure
Hospital beds, medical devices, diagnostic tests, IT systems and skilled manpower
demand will steeply raise.
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
(3) Clean technologies (I)
Macro developments such as urbanization, rapid growth, climate change and
exhaustion of resources is driving the need for investments in clean technologies
in Indonesia.
New clean industries are coming on board to drive the future growth for clean
technologies.
The highest industry potential: clean energy (geothermal, biomass, solar
energy), green building and water and waste management
These particular categories are relevant when discussing Indonesia’s current
approach in regards to an environmental paradigm change in the country, as
Indonesia has a national commitment to reduce carbon emissions by 26% in
2020.
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
(3) Clean technologies (II)
Clean energy
Fossil fuels
dominate the
country’s energy
supply (> 95%
from which 48%
comes from oil)
Fossil fuel
reserves are
exhausting
meanwhile energy
demand is
growing by about
8-11%
Government
priority: utilization
of new renewable
energy and energy
efficiencies
The highest
potential:
geothermal,
biomass and solar
energy
Green Building
Rapid construction
growth: 7-8%
Jakarta Government
regulation No. 38/2012:
new and existing
constructions to meet
energy-efficient standards
The highest potential:
energy efficiency, water
efficiency, indoor air
quality, land and waste
management
(3) Clean technologies (III)
Wastewater
Rapid urbanization,
industrial growth and
increased standards of
living are generating an
increasing amount of
wastewater
The highest potential:
development of new
centralized treatments
plants and networks
improvement, expansion
of the existing ones, new
technologies for sewer
installation
Local governments are
preparing City Sanitation
Strategies
Solid Waste
Need to tackle MSW to
keep pace with the growth
of towns and to avert
health and environmental
disasters
About 80,000 tons of solid
waste is generated daily
Market Potential
The highest potential:
recovering energy for
electricity from waste
EU-Indonesia Business Network
Challenges
Sectors
Indonesia is emerging as a
major ICT market
(4) ICT
It is now the world’s 2nd
largest market for both
Facebook and Smartphones,
and has Twitter’s 3rd largest
user base
With 275million mobile
phone users and 175million
expected internet users by
2016.
The Palapa Ring project will
further boost the growth of
the ICT market and the
number of internet users.
The Palapa Ring project
Market Potential
Some examples of high
business potential: Finance
IT, e-commerce, e-logistics
and cloud computing
EU-Indonesia Business Network
Challenges
Sectors
(5) Maritime infrastructure
Indonesia’s strategic location: over
half of all international shipping goes
through Indonesian waters
 Currently, inadequate port facilities
impeding the country’s internal and
external maritime commerce
 Lack of connectivity in between
islands
Government project: Pendulum
Nusantara. Construction of minimum
6 inter-linked deep-water ports,
building of another 22 ports
compromising completely new ones
and renovated ones.
Indonesia to become a global maritime axis
Market Potential
EU-Indonesia Business Network
Challenges
The highest potential: development
of roads, seaport construction and
revitalization, shipbuilding (tankers
and freighters)
Sectors
 Increasing tourism,
international trade and the
development of regional
economic centers is driving
demand for aviation
infrastructure
(6) Aviation infrastructure
Currently Indonesia is home to
237 airports
26 of which are commercial
airports in big cities managed
by state-run airport operators
PT Angkasa Pura I (AP I) and PT
Angkasa Pura II (AP II). The
others fall under Transportation
Ministry's technical
management unit (UTP)
The highest potential: building of new runways and terminals,
hangars and equipment; and training of human resources
Market Potential
62 new airport projects
currently in the pipeline.
Indonesia to have 299 airports
by 2019
EU-Indonesia Business Network
Challenges
Sectors
Indonesia – a country of contrasts
Famous landmark
Bundaran Hotel Indonesia 1970 - now
Indonesia – a country of contrasts
Street Vendor
Mall
Indonesia – a country of contrasts
Industrial Park ( Tj. Priok)
Unilever in Jababeka
Indonesia – a country of contrasts
Next Trade Missions to Indonesia
Healthcare
Jakarta, October 19
– 23, 2015
ICT
Jakarta, November
23 – 27, 2015
• Medical devices
• Healthcare IT systems
•
•
•
•
Finance IT
Cloud Computing
E-Commerce
E -Logistics
Market Potential
The programs include:
Pre-Consultation and Registration
Tailor-made search for potential
partners
Business roundtable, corporate
seminar and B2B event
Site visit
 Optional B2B service
EU-Indonesia Business Network
Challenges
Sectors
More information ?
www.eibn.org
[email protected]
Thank you for your attention!