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Indonesia Promotes Small and Medium Industry Hubs in Transmigration Areas for Balanced Industrial Growth

Strategic Insights

— 1 min read

To achieve balanced industrial growth between Java and other islands, Indonesia is promoting the development of small and medium industry (IKM) hubs in transmigration areas. The Ministry of Industry sees this strategy as creating added value over natural resources and spurring economic growth. Deputy Minister of Industry Faisol Riza emphasized that building industry to support equitable economic growth through the development of micro and small industries based on industrial areas is a grand strategy for industrialization.

Key Takeaways:

  • Indonesia aims to balance industrial growth between Java and other islands by promoting the development of small and medium industry (IKM) hubs in transmigration areas.
  • An IKM hub can be established in a certain industrial cluster, based on the availability of natural and human resources of the locale.
  • The creation of IKM hubs is expected to supply products for larger industrial areas or stakeholders, ensuring a strong and sustainable business ecosystem.
  • Morowali, Central Sulawesi, is an example of a transmigration area that has transformed into a large industrial area, with 90,000 workers, up from 2,000 people before the industrial area existed.
  • Local commodities with great potential to be developed in transmigration areas include cocoa, coffee, sugar, and corn.
  • Domestic production of cacao is still below national demand, and the ingredient can be processed into paste or used for manufacturing cosmetics and pharmaceutical products.
  • Indonesia coffee has a high demand on a global scale, and serves many purposes, from material for instant coffee to self-care products.
  • Aceh, South Sumatra, and Lampung are among areas with high potential for coffee production.

Statistics:

  • 90,000 workers in Morowali, Central Sulawesi, after the industrial area was established.
  • 2,000 people in Morowali, Central Sulawesi, before the industrial area existed.
  • 20 years of agricultural and maritime sectors are transformed into a center for natural resources processing.
  • National demand for cacao is not met by domestic production.
  • Aceh, Sulawesi, and West Papua have high potential for cocoa farming.

Sources:

  • ANTARA, "Ministry of Industry Promotes IKM Hubs in Transmigration Areas"

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