Industrial Sectors


  1. Agribusiness
  2. This sector produces goods and food products through agricultural crops, fisheries, farms, forests and livestock farms. This sector forms the largest industry in Indonesia, which in 2008 contributed 13.7% to the nation's Gross Domestic Product.

    Industries that are related to this sector are fertilizers, chemicals and rubber/plastic and synthetic product industries. There are 13 companies operating in the rubber sector and 9 companies in the chemical sector. As the driving factor of growth in the agricultural sector, the fertilizer industry is projected to expand by 8% - 10% per year. The products (Urea and NPK fertilizers) are also expected to expand by 3% - 12% per year.

    Implications : the fertilizer industry will gain a high growth momentum, which in turn needs financing for investment, expansion and upgrading. In addition to fertilizers, the chemical industry is also a factor driving the agricultural sector. However, as the basic supplies are inadequate, in addition to competition from AFTA, the financing for this sector should be thoroughly evaluated.


  1. Telecommunications
  2. In order to meet consumer demands on the connectivity speed of mobile, wireless, and broadband internet network access, which since 2006 has shown growth of 20% per year for the mobile and Internet users and 54% per year for broadband users, the government has broken the duopoly of Telkom and Indosat and has given full rights of service towards other operators.

    Furthermore, the government has balanced the connection rates amongst operators to encourage competition. This situation will increase competition amongst the 5-telecommunication companies and will stimulate foreign investment : e.g. Siemens and Lucent have built RND centers in Indonesia. In addition, investments in infrastructure and network expansion & upgrades are projected to increase.

Food & Baverage

  1. Food and Baverage
  2. This sector consists of the cocoa, fruit, coconut, coffee, sugar, tobacco and food & packaged beverage (alcoholic and non-alcoholic) industries. There are two major players in this sector : MNCs that offer goods to consumers who are price conscious, especially amongst the working classes and MNCs that target upper-middle-class consumers.

    The bottled beverage industry holds a 40% share of non-alcoholic drinks. In addition, there is an increase in consumer purchases on a variety of food and beverage products that contribute to the rapid growth of the retailer. Kretek cigarettes, which consist of a blend of tobacco, cloves and other ingredients, represent 90% of the tobacco industry in Indonesia, and is protected from foreign competition.

Oil, Gas, and Mining

  1. Oil, Gas, and Mining
  2. Consisting of the oil, gas, and geothermal exploration sectors. This is an upstream industry that provides raw materials for secondary industries such as refineries. The increase of oil consumption in Indonesia (by 1.5%) has occurred because of the growth in the national's economy.

    The government has issued policies to support investment, such as the abolition of tax on the import of capital goods for oil and gas exploration. This has implications to the accelerated discovery of new oil fields and the exploration of alternative energy sources, such as coal (which enjoys a 10.13% growth rate per year), hydroelectric, geothermal and nuclear power.


  1. Chemicals
  2. The chemical industry is one of the 8 major individual debtors with a total value of Rp 1.738 trillion and the second largest group debtor with a total value of Rp 5.453 trillion. Therefore BNI has implemented a loan growth strategy in the 8 key sectors with the chemical industry being one of them.


  1. Construction
  2. Consisting of infrastructure and property constructions. Contributing Factors :

    • General Infrastructure :
      Improving roads and highways to reduce traffic congestion and to improve access to remote areas.
    • Housing :
      The government is focused on the development of residential housing, especially in rural areas (50% of Indonesia's population live in non-urban areas), which means it will promote opportunities for mid-sized construction companies. The development of upper-class housing will also expand.
    • Non-Housing :
      The wave of urbanization will increase the construction of non-residential sectors (malls, offices, etc.)

  1. Electricity
  2. The electric industry produces electricity intended for households, commercial enterprises, the manufacturing sector, streetlights, as well as the social and governmental sectors. The government has set several provisions to support the privatization of electricity, meaning an end to the State Electricity Company's (PLN) monopoly and to promote competition in the electric sector.

    The situation is as follows : the growth rate of electricity consumption exceeds the growth of the number of power plants, resulting in a significant amount of the population who do not have access to electricity. The government will continue to subsidize the poorer segments of the population to accelerate the economic development. There is a possibility of long-term financing as the government plans to set up a further 83 power plants.

Wholesale and Retail

  1. Wholesale and Retail
  2. The retail segment trade is concentrated in Jakarta, but has been aggressively expanding into Bandung, Surabaya, Medan, Denpasar and to Makassar, Balikpapan, Manado and Pekanbaru.

    Current trading partners : Japan, EU, USA, Singapore, Malaysia and China. Indonesia's exports are dominated by agriculture and raw materials while its imports are in the form of industrial goods.

Of these eight dominant sectors, the agribusiness sector is the most dominant sector despite its decreasing growth rate. However, it includes the food & beverage and tobacco industries that accounts for 50% of the total GDP.

In addition, the wholesale and retail trade sectors are considered as emerging markets with a rapid growth rate. Increasingly sophisticated banking services such as trade finance, remittance, treasury and cash management are essential.

Agribusiness also has a stable percentage of non-performing loans (NPL) and the market demand is relatively clear and definite, unless there is crop failure.

The communications sector has retained its customers, boasts a high level of demand and a relatively stable income. The major players in the mining sector are usually large companies that are financially strong and the government-owned electricity sector always get better treatment from the government.