Not Just Mining: Indonesia to Build Downstream Marine Industry
Jakarta. Indonesia has plans to expand its downstream industry policy, in which it focuses on processing its raw materials for higher added value, into the marine sector.
Indonesia has set a goal to become a global maritime superpower by its centennial in 2045. The world’s largest archipelagic country is working towards that goal, among others, by developing the downstream marine industry.
According to Chief Investment Minister Luhut Binsar Pandjaitan, despite the immense marine wealth, Indonesia’s blue economy potential remains largely untapped.
The so-called blue economy today is still not contributing as much to the national gross domestic product (GDP). The maritime economy only contributed approximately 7.6 percent to the national GDP in 2021. The sector's GDP only grew by 2.04 percent in 2021, far below the national GDP growth of 3.69 percent, data shows.
According to the ministry’s data, the development of the marine processing industry stands at 4.13 percent. The figures only reach 0.74 percent for the ship manufacturing and maintenance industry.
“The development of our marine industry and also the downstream within the marine sector have only reached 4 percent. There are still so many things that we can work on if we want, but let’s walk the talk. Do not just criticize things. We need to come up with innovations,” Luhut told a recent maritime forum in Jakarta.
A high-potential marine resource for the downstream industry policy is seaweed. Indonesia can try processing seaweed into cosmetics, pharmaceutical, and food products, among others. The country can also export seaweed as animal feed.
“We are the world’s largest archipelagic country. Water makes up over 70 percent of our territories. There are so many things we can do here. But we have not built the downstream industry for seaweed,” Luhut said.
“We want to become the center of the global epicenter for maritime civilization. This is not just a dream, but we must be able to do it. We are a rich country!” Luhut added.
According to the Fisheries Ministry, Indonesia is the world’s largest tropical seaweed producer with productions amounting to 9.6 million tons a year. From Jan-Sep 2022, Indonesia exported 180,600 tons of seaweed worth $455.7 million, with exports mainly going to China. About 93.2 percent of the exports were dried seaweed.
Downstreaming is still far from visible in the marine sector. However, the downstream industry policy within the mining sector has begun to take shape. Indonesia in 2020 banned exports of unprocessed nickel ores. Government data shows the nickel downstream exports stood at $33.8 billion in 2022, of which $14.3 billion were iron and steel exports.