Ministry of Industry: Pulp and Paper Industry Demonstrates Role in Driving Manufacturing
Jakarta (ANTARA) - The Ministry of Industry (Kemenperin) states that the national pulp and paper industry continues to demonstrate its strategic role in driving the performance of the manufacturing sector.
In a statement confirmed in Jakarta on Wednesday, Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said that based on 2025 data, the paper, paper products, and printing industry contributed 3.73% to the non-oil and gas processing GDP.
In the same period, pulp exports reached $3.60 billion and paper exports $4.57 billion. Additionally, this sector absorbs more than 280,000 direct workers and 1.2 million indirect workers from a total of 113 companies.
Furthermore, globally, Indonesia ranks seventh in the pulp industry and sixth in the paper industry, as well as second and fourth in the Asian region.
“The contribution provided by this industrial sector to the non-oil and gas processing GDP has demonstrated its strategic role as one of the main pillars of national manufacturing. In addition, the absorption of more than 1.4 million workers also reflects the broad impact of the pulp and paper industry on the national economy,” he stated.
Meanwhile, Acting Director General of Agro Industry Putu Juli Ardika assesses that the pulp and paper industry has significant leverage for national economic growth.
Looking ahead, opportunities for developing this industry remain wide open, as global trends show increasing use of paper-based packaging and flexible packaging, which are considered more efficient, safe, and sustainable.
Paperboard currently dominates around 31.8% of the global packaging market, while the flexible packaging market has exceeded $270 billion and is projected to grow 5-6% per year until 2032.
This growth is also driven by increasing packaging needs from the food and beverage sector as well as e-commerce, the trend of substituting plastic with more environmentally friendly materials, and innovation in alternative raw materials.
The industry is also beginning to develop non-conventional fibre sources such as banana, lemongrass, empty palm oil bunches, and kenaf.
However, several challenges remain, ranging from limited availability of domestic recycled paper, raw material import policies, to global regulatory dynamics such as the European Union Deforestation Regulation (EUDR), non-tariff barriers, and reciprocal US tariffs.
“Despite these challenges, the national pulp and paper industry continues to show positive development, while prioritising green industry principles and circular economy,” said Putu.
To strengthen competitiveness, Kemenperin continues to promote various strategies, including consolidation of raw material policies, improvement of the recycled paper supply chain, innovation in alternative raw materials, strengthening the green industry ecosystem, and providing fiscal and non-fiscal incentives.
In addition, the government has implemented a mandatory SNI policy for food packaging paper and carton through Ministry of Industry Regulation Number 6 of 2025 to improve quality and market confidence.
Sustainability commitments are also strengthened through restrictions on impurities in recycled paper and innovations in residue management such as Refuse Derived Fuel (RDF).
From the market expansion side, Indonesia’s participation as a Partner Country in the INNOPROM 2026 event in Russia is seen as a strategic opportunity to expand market access to the Eurasian region. On the other hand, the performance of the national manufacturing sector also shows a positive trend, reflected in the Industrial Confidence Index (IKI) for February 2026, which is at an expansive level of 54.02.