Official hails Indonesia’s F&B industry as ‘strongest in Asean’

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: Southeast asia

A senior Indonesian official has proclaimed his country’s food and beverage industry as the strongest competition in the burgeoning Asean Economic Community.

Panggah Susanto, director general of agriculture at the industry ministry, said the sector was highly competitive because it is supported by abundant natural resources, such as farming, fisheries, plantations and forestry.

"These industries keep growing and contribute greatly to the national economy​," he added.

The government sees food and beverages as a strategic sector for non-oil and gas growth, with its value increasing by 8.2% in the second quarter this year compared to the same period in 2015.

It has implemented policies, such as the Indonesia National Standard, to improve the quality of the segment, while others, including a focus on improving human resources and accelerating infrastructure, have also benefited growth, Panggah said.

Moreover, policies encouraging research and development, increasing domestic product consumption, harmonisation of local and central regulations and simplifying investment permits are each being pursued. 

Panggah said he was optimistic that these policies can be implemented so that Indonesia’s food and beverage industry will dominate the Asean market.

However, his comments are at odds with the general feeling of the local food industry this year, much of which is not anticipating an export revolution on the back of the formation of the AEC. Many companies are fearful of the prospect of greater competition in what has traditionally been a largely protected market.

The Asean Economic Community was established last year to promote economic, political, social and cultural cooperation across the 10-country regional bloc.

Its aim is to move Southeast Asia towards a globally competitive single market and production base, with a free flow of goods, services, labour, investments and capital across the member states.

The region the third-largest economy in Asia, with a combined GDP of US$2.6tr—higher than in India, though working within the confines of the AEC’s nine-year integration timetable has been a struggle for member states.

Yet the process to harmonise food standards is far behind schedule and sources do not believe it will come close to being achieved in this decade.

Related topics: Markets, South East Asia, Supply chain

Related news

Follow us

Products

View more

Webinars

Food & Beverage Trailblazers

F&B Trailblazers Podcast