Apindo: Raw Material Supply and Energy Remain Challenges for Industry
The Indonesian Employers Association (Apindo) assesses that the supply of raw materials and energy prices remain the primary challenges facing the national industrial sector. These conditions are believed to be driving up production and raw material import costs, thereby contributing to Indonesia’s trade deficit in May 2026.
Although exports continue to grow, the surge in imports due to high industrial demand has been a factor weighing down national trade performance. Statistics Indonesia (BPS) recorded that Indonesia’s trade balance in May 2026 experienced a deficit of US$1.61 billion. Meanwhile, inflation in June 20lag reached 0.44% month-on-month, with calendar year inflation at 1.79% and year-on-year inflation at 3.34%.
Bob Azam, Chairman of the Labour Division of Apindo’s National Leadership Council, stated that while export performance still shows growth, the surge in imports is the main reason the trade balance has turned into a deficit. Bob explained that the increase in imports is influenced by the weakening of the rupiah exchange rate, rising energy prices, logistics costs, and financing interest rates. These factors have made import costs, particularly for meeting industrial raw material and energy needs, increasingly high.
“Exports are still growing, but imports have risen sharply due to the weakening rupiah as well as increases in energy prices, logistics costs, and interest costs,” Bob Azam told Media Indonesia on Wednesday (1/7).
He added that these pressures are not only experienced by Indonesia but are also felt by many countries. According to him, global supply chain disruptions and logistics distribution that has not yet fully recovered remain challenges affecting international trade activities.
On the other hand, Bob assesses that demand from several of Indonesia’s major export markets remains relatively stable. However, a slowdown is becoming visible in several regions of East Asia and Southeast Asia, including India and China. Therefore, business actors need to increase operational efficiency while diversifying export markets to maintain growth amidst global uncertainty. “The reality is, the supply of raw materials is still difficult, as is the supply of energy,” said Bob.
He believes these issues are the greatest challenges still facing the national industrial sector. Consequently, efforts from the government and other stakeholders are required to strengthen supply chain resilience, guarantee energy availability, and maintain the stability of production costs so that the competitiveness of Indonesian industry remains preserved.
Indef is urging the government to find a middle ground in responding to the rise in liquefied natural gas (LNG) prices, which is being felt by some industrial customers. The Abadi Masela gas project is targeted for construction in 2027 and production in 2029-2030 to strengthen energy security.
The most important thing for Pertamina to do is to continue improving the quality and capacity of energy to be used by both the public and industrial players. Energy independence is considered one of the determining factors for Indonesia’s competitiveness amidst the changing global economic and geopolitical landscape. Energy distribution is a crucial factor in maintaining national energy security, especially amidst the increasing demand for liquefied natural gas (LNG) across various sectors.