Indonesia: A dynamic market full of opportunities

Jan Rönnfeld, Executive Director of the German-Indonesian AHK, on the importance of Indonesia as a partner and its fast growing business sectors

With Indonesia as a partner country at the HANNOVER MESSE this year, the focus lies on a country that has
been missed out or rather disregarded by many German businesses. Yet, there is hardly any country in the world that has undergone such constant social and economic development. With the motto “Making Indonesia 4.0”, the country presents itself as a potential market for industrial transformation technologies and will demonstrate successful examples thereof, as well as the government’s future plans to sustainably modernize the country and its industries.

What makes Indonesia an exciting long-term partner?

Indonesia is an archipelago consisting of approximately 17,000 islands located in Southeast Asia. As part of ASEAN, Indonesia is strategically located in the middle of large and fast-growing countries and oceans. Moreover, Indonesia is home to approximately 280 million people and it also has the fourth largest population in the world. Indonesia is rich in both fossil resources and mineral resources. The temperate tropical climate and volcanic nutrient-rich soils make the cultivation of palm oil, natural rubber, cocoa and coffee in large quantities possible. Opportunities for technology sales and partnerships abound in Indonesia
The government’s current focus is on increasing the added value in the country, especially in the processing of raw materials. For example, as the country with the world’s largest nickel deposits, Indonesia has managed to become the world’s largest exporter of stainless steel within the last few years. Indonesia has increased its share of the global nickel market which is relevant for the production of batteries and will grow to almost two thirds of the world’s mined nickel by 2030 with an investment volume of more than USD 25 billion.

Another sector that has grown particularly strongly in Indonesia in recent years is Information Technology and Communication (ITC).

The fast-growing and young middle class of the country is creating a huge demand for digital products and services. The government supports this development in many ways by including the necessary infrastructure such as broadband cables, tax incentives for technology companies as well as the development and use of e-government services which lead to a rise of the digital economy. The vibrant ITC sector is one of the reasons why Indonesia has become the second largest market for IPO listings in Asia behind China.