Jakarta. The Indonesian Export Financing Agency (LPEI), also known as the Indonesia Eximbank, is encouraging Central Javan small businesses to boost their global presence. 

The province is the fifth-largest source of exporters in the country. According to the Central Statistics Agency (BPS), Central Java is home to 2,261 exporters, 1,897 of whom have an export value of under Rp 50 billion ($3 million). To increase its growth, the Indonesia Eximbank recently held the 2024 LPEI Export Forum that brought together Central Javan exporters in Semarang. 

Data showed that the exported goods from Central Java mainly comprised clothing and accessories (both knitted and non-knitted), footwear, and wooden goods, among others. The US bought 30.43 percent of the province’s exports, making it the largest export destination, followed by China (7.66 percent) and Japan (6.51 percent). The number of buyers collaborating with Central Javam exporters continues to increase, with 22.25 percent of whom are loyal buyers.

"LPEI supports increasing exports of business actors by providing facilities such as business matching activities to expand their access to international buyers, both conventionally and digitally,” said LPEI’s managing director for business development Maqin U Norhadi.

LPEI's market intelligence and leads management chief specialist Rini Satriani said that Central Javan exports would remain stable until next year as some goods held great export opportunities. Wooden goods are expected to reach $2.2 billion in export value. Rini added: “Furniture can reach $2.3 billion [in export value], and essential oils for beauty products are estimated at $1.4 billion."

LPEI has also provided a series of initiatives to support exporting small and medium enterprises (SMEs). These businesses can take advantage of the various special export assignment programs (PKE) according to their existing export profile/characteristics, including PKE UKM (designed for export-oriented SMEs), PKE Regional (for non-traditional country destination markets), and PKE Trade Finance (with trade transaction scheme).

Until June 2024, LPEI had disbursed regional PKE facilities amounting to Rp 4,247 billion with exports to over 40 countries. PKE Trade Finance reached Rp 8,187 billion with exports in more than 55 countries, while its PKE UKM counterpart amounted to Rp 1,058 billion with exports going to over 65 countries.

Fancy paper producer Margono Paper is among the businesses that have used LPEI’s PKE financing. About 90 percent of its products get exported to 50 countries spread across 5 continents. The regional PKE financing has helped the company export its goods to non-traditional markets. According to Margono Paper’s export director Ferianti Chandranta, the company needed extra capital to meet the high demand for fancy paper as the pandemic had caused the fancy paper factors in Europe and China to close.

"LPEI comes with various products that can help export-oriented business actors. The LPEI financing is able to increase the company's competitiveness to penetrate the global market, including exports to non-traditional markets. With very competitive interest rates, we can achieve a smooth cash flow and increase capital to purchase raw materials, enabling us to innovate and expand the product variations,” Ferianti said.

LPEI also not long ago held a meeting with some SMEs in Yogyakarta. Representatives from the Central Javan office of the Indonesian Chamber of Commerce and Industry (Kadin) were also present. The meeting aimed to prepare SMEs and exporters to enter the digital platform that is being prepared by LPEI.

 “Our coaching for new exporters and foreign exchange village program enables us to provide aid and nurture new exporters, while also strengthening the export ecosystem. … We are also currently preparing a marketplace to improve the export ecosystem so export-oriented businesses can go global,” Maqin said.

According to Maqin, the marketplace will help SMEs boost their export performance by using data and technologies to improve their decision-making.