Collaborating With The Ministry Of Industry And Astra, Kadin Wants IKM To Advance To Class Through This Partnership

Deputy Chairperson of the Indonesian Chamber of Commerce and Industry Bobby Gafur Umar (second from the right). (Photo: Doc. Kadin)

JAKARTA - Small and medium industries (IKM) play a major role in supporting the national economy. However, IKM is still facing a number of challenges to be able to increase its capacity.

These challenges include manufacturing competence and the quality management system of IKM, market access for IKM with large industry players, negative impacts due to the COVID-19 pandemic, as well as opportunities to get financial support from government and private banks.

Therefore, the Indonesian Chamber of Commerce and Industry (Kadin) together with the Ministry of Industry (Kemenperin) and PT Astra International Tbk through the Dharma Bhakti Astra Foundation held the IKM Closed Loop program since 2022.

The inclusive partnership movement for IKM to advance to that class was held to increase market capacity, opportunities, and access to market and financing for IKM, especially the transportation industry sector.

"This program started on November 1, 2022 at the Ministry of Industry Building through the event Exhibition, Link & Match 2022. IKM Closed Loop has yielded results, such as opening opportunities and access to markets, increasing access to raw materials, to increasing contribution to the level of domestic components (TKDN)," said Director of Small and Medium Industry Metal, Machinery, Electronics, and Transportation Equipment of the Ministry of Industry. Dini Hanggandari in her official statement, quoted Thursday, November 23.

Based on data from the Ministry of Industry in 2023, the number of IKMs grew to 4.4 million business units or equivalent to 99.7 percent of the total industrial business units in Indonesia. The IKM sector has also absorbed up to 12.39 million workers or 66.25 percent of the total workforce in the industrial sector.

Throughout 2023, the participants of the IKM Closed Loop program received various training and guidance and assistance, such as basic mentality training, Ringkas, Rapi, Resik, Rawat, Rajin (5R) training, Health, Safety, Safety (K3L) training, as well as technical training and marketing of financial management for IKM players.

In addition, reviews and monitoring of MoU realization throughout 2023 and assessments were also carried out to ensure that IKM could advance to class as expected.

On the same occasion, Deputy Chairperson of the Indonesian Chamber of Commerce and Industry Bobby Gafur Umar said the IKM Closed Loop program not only improved quality, but also helped participants to get financial support.

"Currently, 32 IKMs have signed the MoU and received a purchase order of Rp. 105 billion with tiers 1 under the auspices of PT Astra International," he said.

Bobby said, there are five financing institutions, both banks and non-banks, including Bank Rakyat Indonesia (BRI), Bank Mandiri, Bank Sinarmas, Astra Ventura, and Surya Artha Nusantara Finance.

"This institution provides credit contracts to 10 IKMs that support the Class Upgrading IKM program," he said.

He added that the inclusive partnership movement for IKM to advance this class will continue in 2024 and is not limited to the IKM Closed Loop program, but also by holding the IKM Innovation Award.

"This award event for IKM who made the best innovation is open to all SMEs in the transportation sector," added Bobby.

Meanwhile, Chairman of the Standing Committee for Small and Medium Industries, the Indonesian Chamber of Commerce and Industry's Transport Equipment, Rama Dukata, said this collaboration program was an effort to build a more inclusive IKM ecosystem.

"With the collaboration between the Indonesian Chamber of Commerce and Industry, the Dharma Bhakti Astra Foundation, and other financing institutions, we believe the IKM sector can continue to develop, advance to class, and be able to meet demands for quality, cost, and delivery from large industries," said Rama.

"As well as the implementation of the culture of innovation in IKM, IKM will be able to survive in responding to challenges in the future," he added.