Transcript 3. The EU-Indonesia Business Network

EU – Indonesia
Business Network:
“Your Gateway to Indonesia”
Population
of
250 Million
10th largest
economy
worldwide
Largest
population
of Muslims
worldwide
2nd fastest
growing G20
Indonesia
Third biggest
democracy
worldwide
Ø Inflation
2007-2013:
6.0%
Ø real GDP
growth
2007-2013:
6.0%
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
Sustained GDP growth
Real GDP growth (%)
Inflation (%)
7
12
6
10
5
8
4
6
3
4
2
1
2
0
0
2007
2008
2009
2010
2011
2012
Sustained high
growth rates
Market Potential
2013
2007
2008
Independent
Central bank 
stable inflation
rates
2010
2011
250 million
inhabitants 
10th largest
economy in the
world
EU-Indonesia Business Network
Challenges
2009
Sectors
2012
2013
Economic activity by region
Stable macroeconomic environment
General Government Gross Debt Indonesia
(%GDP)
100
90
Fitch
• BBB• Outlook: Stable
Moody’s
• Baa3
• Outlook: Stable
Standard
& Poors
• BB+
• Outlook: Stable
80
70
60
50
40
30
20
10
0
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
Stable political environment
• Since 1998 thriving
and stable
democracy
• Newly elected
President: Joko
Widodo (former
governor of Jakarta)
Dr Susilo Bambang Yudhoyono
President 2004-2014
Joko Widodo
Governor of Jakarta 2012 – 2014
Presidential candidate 2014
Large domestic consumption base…
Structure Indonesian Economy (% of total GDP)
Export of goods
and services
19%
Household
Consumption
Expenditure
46%
Changes in
Inventories
2%
Gross Domestic
Fixed Capital
Formation
26%
Market Potential
EU-Indonesia Business Network
Challenges
Government
Final
Consumption
Expenditure
7%
Sectors
Large
domestic
consumer
base
=
Locomotive
and guarantor
of GDP growth
… that will grow even further
Population development prediction (in million inhabitants)
300
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
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 be cumbersome due to inefficient
bureaucracy
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. The EU-Indonesia
Business Network (EIBN)
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
What is the EIBN?
Britcham
EuroCham
IFCCI
A consortium of
European
chambers of
commerce
INA
CCI
Barcelona
EIBN
EKONID
Market Potential
Eurochambre
EU-Indonesia Business Network
Challenges
Sectors
Mission
• Promotion of Indonesian market among EU companies
• Business support services for companies, especially SMEs, from all
EU28 member states
Origin &
location
• Initiated & co-funded by EU, launched 2013
• Located in Jakarta, Indonesia
Resources
• Team of European & Indonesian experts from all 7 chambers
• Long-standing experience of more than 40 years in the Indonesian
market
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
About EIBN
Expertise
• Joint expertise, knowledge and experience of 7 chambers of
commerce
• Extensive network in Indonesia and Europe
Services I: Knowledge center
Interactive
webportal
Database
Knowledge
Center
Publications
Newsletter
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
www.eibn.org
Services II: Market Entry
Pre-market
check,
market &
Helpdesk sector
analysis
Market Potential
Business
partner
search
EU-Indonesia Business Network
Challenges
Sectors
Business
Delegations
Trade Fairs
4. Sector Potentials
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
Food and beverage industry
FOOD AND BEVERAGE
Indonesia is Asia’s third-largest agricultural
producer (after China and India), its food and
agribusiness trade is valued at US$44.5 billion
PACKAGING
The country’s packaging industry expects
revenues to grow by 8,7%, boosted mainly by the
local food, beverage and pharmaceutical
industries
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
Electronic industry
Electronics:
•
•
•
•
Market volume: US$30 billion
Average growth 8%
Market volume in 2025: US$80 billion
Gross value added growth of 6% annually
Electricity Production
•Annual growth rate of 12% in energy consumption
•Market potential for sectors linked to energy
production
Healthcare
 Healthcare: Growth 8.2%
 Medical devices: Growth 4.0%
 Currently, government and private spending in the
health sector only 2% of GDP
 Next 30 years rise to 8%, totaling about USD 1
billion in investment to meet demand
 An estimated 56% of Indonesia’s population have
some form of health insurance
 Health Ministry’s 2014 goal of universal coverage
(base safety net)
SOURCE: KADIN / BUSINESS MONITOR
Market Potential
EU-Indonesia Business Network
Challenges
Sectors
Engineering
MECHANICAL ENGINEERING & PLANT CONSTRUCTION
• Market volume today is US$18 billion
• Average growth of 7%
• Market volume until 2025 > US$47 billion
• Gross value added 37%
METAL WORKING & PROCESSING
• Average growth of 4,2%
• Market volume until 2025 > USS34 billion
Market Potential
EU-Indonesia Business Network
SOURCE: PROGNOS 2012 / BDI STUDY
Challenges
Sectors
More information ?
www.eibn.org
[email protected]
Thank you for your attention!