Agus Gumiwang Reveals 'Big Homework' for Indonesian Industry, Utilisation Only 64.8%

The performance of Indonesia’s manufacturing industry still faces homework even though its growth is beginning to show strengthening. One of the issues that needs to be addressed immediately is the utilisation of industrial production capacity, which remains suboptimal.

Industry Minister Agus Gumiwang Kartasasmita said that the utilisation of the non-oil and gas processing industry is still below the expected level. The government wants the available capacity to be utilised more optimally so that industrial growth does not stop only on the production side.

“Utilisation of the non-oil and gas processing industry is still at 64.8%, and this is still a figure that we need to improve. We need to increase it to a minimum range of 70% or more,” Agus said during a working meeting with Commission VII of the Indonesian House of Representatives on Monday (31/8/26).

This room for growth is also closely related to the industry’s ability to sell its products. Absorption of manufacturing output shows that the domestic market plays a far greater role than the export market.

“Because currently, 78.4% of the output from our manufacturing products is absorbed in the domestic market, and only 21.6% is sent to other countries as export commodities,” he said.

The large domestic market is an asset that is difficult for other countries to match. With a population approaching 290 million people, Indonesia has a consumer base that can support the national industry.

“Therefore, with a population reaching nearly 290 million, Indonesia has an extraordinarily large domestic market strength and it must, it must be optimised for our national products. Our products must become masters in their own country,” Agus said.

Market strengthening is then pursued through a number of policies within the authority of the Ministry of Industry. These measures are directed at safeguarding the market for national products while expanding the industry’s ability to penetrate exports.

“Based on the authority we have directly, the Ministry of Industry continuously strengthens domestic market protection through mandatory SNI policies, the application of TKDN in domestic product procurement, the application of green industry standardisation, as well as halal certification,” Agus said.