Indonesia Outlook 2023: Potential in the Mining Sector

Indonesia Outlook 2023: Potential in the Mining Sector

  • InCorp Editorial Team
  • 18 June 2024
  • 4 minute reading time

The new year always brings hope for change and growth. As we inch closer to welcoming 2023, the public can’t help but wonder what is in store for Indonesia. With the threat of global recession looming over all the countries, the Ministry of Investment reveals that particular sectors will stand out in Indonesia. Here is the Indonesia Outlook in 2023.

Indonesia’s Economic Outlook in 2023

The potential sectors will continue to be encouraged so that investment realization can meet next year’s target. These sectors are the primary metal and value-added industries like nickel and copper. 

The industries mentioned above have seen exponential growth over the past three years. Therefore, they will receive extra incentives and support to realize investments to keep the economic growth steady above 5% in 2023 and meet their goals.

Even though the prediction for next year is that the global economy will experience a general slowdown, the Minister of Investment is optimistic that Indonesia can meet the target of IDR 1,400 trillion through joint efforts. It is a challenge to overcome by carrying out responsibilities with optimum efficiency. 

Government Plans to Realize in 2023

Indonesia has continued to accelerate its economic recovery post the initial stages of the COVID-19 pandemic, resulting in a significant downward slump in the nation’s economy. It is due to the efficient launch of the vaccine, the allocation of the state budget as a shock absorber, and various other factors.

The Indonesian government projects national economic growth of 2023 to be 5.3%. This number is much higher than the global economy’s outlook to be around 2.2% to 2.7% in prediction.

Indonesia Outlook 2023: Potential in the Mining Sector

Aside from this, the Indonesian government also plans to increase national food reserves by paying attention to the availability of various staple food commodities. 

In addition, Indonesia also plans to accelerate the investment and development of electronic vehicles in the upstream and downstream industries. 

Welcoming Industry Positivity in Indonesia

Various stakeholders across different sectors share optimism regarding the year to come. It is primarily seen within the agrochemical sector, as seen through PT ChemStar Indonesia Tbk, expecting a 200% growth in 2023 compared to this year. 

Currently, the company is undergoing relevant processes to team up with Baker Hughes Indonesia, a US subsidiary in the energy sector. 

The company is also looking to sign a Memorandum of Understanding with PT Zeus Kimiatama Indonesia to collaborate in supplying the energy industry. 

PT Bumi Resources Tbk also aims to increase its coal production in the coming year substantially. BUMI’s coal production volume in the nine-month of 2022 decreased by 9% annually. The decline in production levels was due to mining operations constrained by the weather, namely high rainfall. 

Production has reduced due to high rainfall disturbances in East and South Kalimantan. However, it helps the spirits of PT Bumi Resources Tbk as it aims to produce 80 million tons of coal in 2023. 

Indonesia Outlook 2023: Potential in the Mining Sector

Read more: Why You Should Care About Preparing Growth Plans For Business

Opportunities to Capitalize on Indonesia’s Economy in 2023

Indonesia recently passed its 2023 national budget. This budget seeks to rebuild the country’s economy and lift the country to a higher level. A new allocation of IDR 3,041.7 trillion identifies productivity and quality human resources as critical factors for the success of an inclusive Indonesian economy.

To kickstart your business, below is an excellent list of opportunities available today to build a profitable business in 2023.

Invest in MSMEs

The government has always placed particular importance on assisting MSMEs to grow within Indonesia. In 2023, it targets 30 million MSMEs to adopt digitalization to develop their business. 

President Jokowi states that economic digitalization has successfully birthed 2 Decacorn companies, namely GoTo and J&T Express. The same will have expected of other companies in the digital process. MSME is one of the safer investment areas.

Property Investment

The recession is said to have little to no impact on property investment. Developers remain optimistic that the real estate sector will continue to grow despite adverse conditions. 

The favorable climate projects to the increasing residential needs of Indonesians. Investors looking to avoid economic crises and security shocks should invest in this sector. 

Manufacturing Company

The manufacturing sector’s contribution to the Indonesian GDP has always been substantial. The Indonesian government continually configures incentives to attract foreign investors to the manufacturing sector seeing as a US company subsidiary market potential.

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Start Investing in Indonesia

Having discussed the points above, investors looking to set up a company in Indonesia should consider rendering services from InCorp, especially regarding product registration and company establishment

As a trusted consultant, advisor, and business partner, InCorp Indonesia (formerly Cekindo) is ready to implement customized solutions for your business needs. This way, companies can focus on the operational and strategic aspects without worrying about administrative matters.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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Frequent Asked Questions

You can transfer the license as long as your current local distributor agrees to change the product license holder. The procedure will be different for each product category. We can only recommend you try to prevent these issues by setting cooperation with a trustworthy partner from the beginning

Before you can distribute your products in Indonesia, you will have to register your product with the BPOM (National Agency of Food and Drugs) and MoH (Ministry of Health). Only an Indonesian legal entity can register the product. If you decide to distribute your product via a local distributor, they will register the product under their entity in Indonesia and become the product license holder. Cekindo can act as your local distributor and register the product under its name.

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.