Ministry of Industry: 49.5 Percent of Japanese Companies in Indonesian Want to Expand Business

JAKARTA - The Ministry of Industry said that as many as 49.5 percent of Japanese companies in Indonesia expressed their desire to expand.

This figure was obtained from the results of the 2023 Business Conditions of Japanese Companies survey conducted by the Japan External Trade Organization (JETRO).

"This was driven by many companies stating that there was an increase in demand from the domestic market," said Industry Ministry spokesperson Febri Hendri Antoni Arif in Jakarta, quoted from Antara, Tuesday, March 19.

He said that with Indonesia's positive business conditions, around half of the Japanese companies in Indonesia surveyed expressed their desire to expand their business in the next one to two years.

The survey results also show that the percentage of business expansion in Indonesia continues to increase after the COVID-19 era, this is different from conditions in China which continues to experience a decline in expansion in the same period.

Apart from that, according to him, as many as 42.1 percent of Japanese companies in Indonesia answered that the estimated operating profit for 2023 had increased compared to the 2022 survey.

"In addition, only around 4.2 percent of respondent companies stated that they would reduce capacity or relocate to other countries," said Febri.

Febri argued that expanding domestic market needs was the main reason for companies to expand their business.

He assessed that Japanese companies in Indonesia see several factors as advantages of doing business in Indonesia, such as market size, growth potential, low wage costs, ease of recruiting local staff, local industrial clusters formed by client companies, as well as political and social stability.

He further said that the transformation towards Industry 4.0 is the concern of Japanese companies in Indonesia. About 30 percent of companies said they had implemented automation in production, and 70 percent of the companies surveyed were interested in doing so.

On the other hand, JETRO Jakarta President Director Takahashi Masakazu said that the Japanese Companies Business Condition Survey aims to understand the current business activities of the country's companies in Asia and Oceania.

Apart from that, several activities are carried out by JETRO to support the business of Japanese companies in Indonesia, one of which is holding seminars related to Domestic Component Level (TKDN) certification with PT Sucofindo.

"The focus of this main activity is to provide an explanation of the concept of calculating TKDN and Company Benefit Weight (BMP) to companies so they can increase the TKDN value of their products," he said.