Industries

The government has already allocated US$455 million for electric motorcycle subsidy since it was announced in May 2024. The subsidy will cover the purchase of 800,000 new electric motorcycles and the conversion of 200,000 combustion engine motorcycles into electric ones.

Indonesia is a country with great potential for developing renewable energy as the Government has emphasized Indonesia’s potential as a leading hydrogen and green ammonia producer in the region.

Tourism industry in Indonesia has recovered well with 21% growth of visits from foreigners in the first half of 2024. Further recovery combined with completion of some major connectivity infrastructure could lead to growth of investments in the hospitality industry.

Nickel has been traded above US$16,000 per ton in the past few weeks, but still 18% below the same period last year as concern on oversupply from Indonesia lingers on. Some companies operating RKEF smelters are now negotiating with banks to get refinancing for lower rates to stay afloat.

Tire manufacturers listed on the Indonesia Stock Exchange (IDX) came up with mixed results in the first half of 2024, but in general reported better operating profit margins on lower or flat cost of goods sold.

In a recent development in steel industry, India’ stainless steel manufacturer, Jindal Stainless Ltd, continues to expand its industrial footprint in Indonesia. Jindal is one of the largest stainless steel producers in the region with crude capacity of nearly two million tons per annum.

Last year was bad enough for state steel producer Krakatau Steel (KRAS) with net loss of US$66.54 million. In the first half of this year, however, the company already recorded US$64.2 million of net losses, surged by 75% from the corresponding period last year.

Continuation of the high-speed train connecting Bandung (West Java) and Surabaya (East Java) is now in the hands of the next administration of Prabowo-Gibran. The project is now in the pre-feasibility study, but it remains to be seen of whether the new government will use different approach.

Indonesia has attracted some major battery and electric vehicles (EV) manufacturers to invest in domestic production, including South Korea’s Hyundai Motor Group and LG Energy Solution which launched the first battery cell production last month. The plant is integrated with Hyundai’s plant where they will produce EVs with Indonesian-made batteries.