Indonesia's Manufacturing Industry Most Popular Foreign Investment

Indonesia's Manufacturing Industry Most Popular Foreign InvestmentTwo sectors of the Indonesian economy stand out as most popular destinations of foreign investments in the first six months of 2013. These are Indonesia's manufacturing sector and the construction, property and real estate sector, which grew 46.7 percent and 100.6 percent respectively compared to the same period in 2012. Based on data of the Indonesia Investment Coordinating Board (BKPM), foreign direct investments in Indonesia increased 23 percent to USD $14.1 billion in the first semester of 2013.

Foreign investors were particularly interested in investments in Indonesia's automotive (and components) industry, machinery and electronics. The automotive sector was target of most investments with USD $1.8 billion in the first semester of 2013.

Indonesia's manufacturing sector has seen growing foreign investments in recent years. The manufacturing sector's contribution towards total foreign investments was about 35 percent between 2010 and 2012 but grew sharply to 56 percent in 2013. For the country this constitutes a good development as it lacks a high quality manufacturing sector and, as such, needs to import most higher quality manufactured products from foreign countries.

Foreign Investment Realization (in USD million):

Sector      2012
Semester I
Semester I
Growth (YoY)
Agriculture    1,032.3      722.7      -30.0%
Mining    2,098.3    2,618.3        24.8%
Manufacturing    5,460.3    8,011.6        46.7%
Electricity, Gas & Water      749.3      688.3       -8.1%
Construction, Property and Real Estate      365.3      732.7     100.6%
Trade, Hotel and Restaurant      707.8      442.7      -37.5%
Transport, Warehouse & Communication    1,071.2      812.0      -24.2%
Other Services      481.4      192.4      -60.0%
Total Foreign Investments   11,966.0   14,220.7       18.8%

Source: Investor Daily