Indonesian and Thai businesses can unlock incredible potential by diving into the manufacturing supply chain industries. This promising outlook was highlighted during the recently held “Business Forum 2024: Investment Opportunities in Manufacturing Supply Chain Industries of Indonesia.” This event, orchestrated by the Indonesian Embassy alongside the Indonesia Investment Coordinating Board, aimed at wooing Thai investors, especially those interested in the coal and mineral sectors.
Fuad Adriansyah, the Deputy Chief of Mission at the Indonesian Embassy, passionately emphasized that the manufacturing sector reigns supreme as the biggest contributor to the GDP of the Association of Southeast Asian Nations (Asean). Astonishingly, it pulled in a staggering US$760 billion (roughly 25.3 billion baht), making up a whopping 21% of the total Asean GDP in 2022.
For Indonesia, it gets even more exciting. The country is blessed with an abundance of natural resources, mainly coals and minerals. “Minerals like nickel, tin, bauxite, and copper are the lifeblood of countless manufacturing industries, particularly in electrics, electronics, automotive sectors, and the burgeoning field of electronic vehicles,” Adriansyah explained enthusiastically.
Moreover, the Indonesian government is wholeheartedly pushing for investments in the supply chain industry, moving away from the traditional export of raw materials. Following the bans on nickel and bauxite exports in 2020 and 2023, respectively, the landscape has evolved. “This transition, while challenging, presents golden opportunities for investors to establish supply chain industries here in Indonesia, leveraging abundant local labor and proximity to raw material sources,” Adriansyah enthused.
Thailand’s investment in Indonesia stands as a testament to the synergy between the two nations. From 2017 to 2022, Thai investors injected a commendable US$1.52 billion (about 54.2 billion baht) into around 1,400 projects across Indonesia. And just in the first half of 2024, Thai investments soared to US$225 million.
“The Thai business sector boasts a rich experience in building robust manufacturing supply chains, with over half of their production woven into the global supply chain,” Adriansyah noted. “Given Thailand’s comparative advantages, Thai enterprises can pursue even stronger collaborations and flourish alongside Indonesia.” It’s a win-win narrative that many Thai businesses are ready to explore.
Adding her voice to the chorus, Tanita Sirisup, the Executive Director of the Foreign Investment Marketing Division from the Thailand Board of Investment (BoI), highlighted the shared vision of economic integration within Asean. Amidst global uncertainties, Asean shines brightly as a haven for foreign investment, boasting a combined nominal GDP of US$3.6 trillion, projected to climb to US$4.5 trillion driven by rising domestic consumption, export-oriented manufacturing, and a youthful workforce.
“Further economic integration, embracing sustainability, digital progression, and expanding trade and investment relations are crucial for Asean nations,” Sirisup emphasized. “Indonesia is one of Thailand’s vital trade and investment allies, ranked among the top 10 investors in Thailand with investment applications valued at US$230 million, predominantly from air transport industry projects.”
The spectrum of Thai investments in Indonesia is broad, spanning energy, mineral mining, retail sectors, and agriculture. Sirisup pointed out there’s still plenty of room to grow. “As both countries continue to consolidate their partnership, focusing on future growth engines for sustainable development is essential,” she urged.
The Thai government’s strategy to foster investments in strategic sectors such as bio-based and renewable energies, smart electronics, new energy vehicles, digital and creative industries, regional headquarters, and international business centers aligns perfectly. “Joining forces, Thailand and Indonesia can achieve remarkable economic and industrial development goals. Both nations possess immense potential to build a resilient supply chain, leveraging their raw materials, natural resources, labor force, and accessible markets,” she said confidently.
With the backdrop of global supply chain shifts and the heightened need for resource security, Thailand and Indonesia’s collaborative potential shines brightly. Thailand’s robust supply chains in automotive, electronics, chemical and petrochemical sectors, and agro-processing can dovetail seamlessly. Thai companies stand to benefit from Indonesia’s wealth of natural, agricultural, and fishery resources and its vast domestic market.
“Together, our countries can craft value-added products for Asean and beyond. There’s a world of opportunity in renewable energy, digital transformation, and infrastructure development, ripe for investment and collaboration. As both nations increasingly prioritize sustainable development, Thai businesses have a golden chance to invest in the burgeoning green economy and vice versa,” Sirisup concluded, her optimism palpable.
This partnership sounds great on paper, but can Indonesia truly provide the level of infrastructure needed to sustain such a massive investment influx?
You underestimate Indonesia’s capability, Joe. They’ve been making strides in improving their infrastructure for years now.
Anne, while Indonesia is improving, they still face significant challenges like political instability and corruption. This could deter some investors.
True, Kevin. Stability and transparency are crucial for any significant foreign investment. Hoping for the best isn’t viable for high stakes investments.
Plus, remember that Thailand might be wary of over-relying on another nation’s infrastructure when they have stable arrangements within their own borders.
Fuad Adriansyah made some compelling points about Indonesia’s resources. But are these resources being extracted sustainably, or are we looking at potential environmental catastrophes?
I think the emphasis on electric vehicles is great! This could be a game changer for the automotive industry in both countries.
Electric vehicles? Indonesia needs to fix basic issues like traffic management and pollution first!
It’s not about choosing one over the other, grower134. It’s about tackling multiple challenges at once. The EV industry can actually help reduce pollution.
LOL, EVs in Jakarta traffic? Good luck with that! Maybe invest in better public transport first.
Tanita Sirisup’s optimism about the combined GDP is contagious. But will the benefits truly trickle down to the citizens in both countries?
Focus on sustainability is critical! Both nations should prioritize sustainable practices or face severe long-term consequences.
Why is Thailand investing so heavily in Indonesia when they have their own supply chain sectors to develop?
Strategic diversification, Larry. It’s about spreading risk and tapping into Indonesia’s raw materials.
I see that point, Mark. But it seems like Thailand could face economic dependence on Indonesia in the long run.
Indonesia and Thailand working together could make ASEAN a real powerhouse! Cooperation beats competition any day.
How realistic is it to expect a seamless collaboration between businesses of two countries, especially given the cultural differences?
Good point, Eve. Cultural differences can indeed pose challenges. It requires strong cross-cultural management.
This sounds like such government propaganda. Will the common people really see any benefits out of these supposed ‘opportunities’?
Considering the world’s shift to renewable energy sources, it’s a smart move for them to focus on this sector.
Indonesia banning raw material exports is a bold policy. Only time will tell if it benefits or backfires.
It’s a high-stakes gamble, PolicyBuff. If it pushes local manufacturing, it might just be worth it.
Will Thai companies really benefit from Indonesia’s resources? They already have strong supply chains in place locally.
I think the potential for digital transformation here is huge. Just hope bureaucracy doesn’t slow things down.
There’s a lot of optimism here, but no one’s talking about the risk factors. What happens if there’s a political or economic downturn?
Thai businesses making such investments might just make things worse for local Indonesian businesses.
Economic integration within ASEAN is a fantastic vision, but it requires genuine cooperation and political will, which isn’t always easy to muster.
The emphasis on young labor forces in both countries is smart. They need to harness this potential wisely.
There’s so much talk about potential benefits, but how will they address the environmental impact of increased manufacturing?
Interesting read! Cooperation sounds beneficial, but given Indonesia’s raw material bans, Thai businesses must reassess their strategies.
Will this partnership actually lead to better living standards for people in both countries, or is it just another way for the rich to get richer?
I agree with Tanita Sirisup that ASEAN is a haven for investment. Their growing GDP is proof of that.
Focusing on sustainable development is good, but it’s tough to implement. Talk is easy; action is what matters.
Indonesia’s and Thailand’s collaboration in manufacturing could set a blueprint for other ASEAN nations.