Kemenperin Optimizes IKM Equipment Restructuration Efforts Following Furniture Exports Increasing by 30%

 JAKARTA – Indonesia’s furniture industry recorded good performance levels during the Covid-19 pandemic. The industry’s exports in 2020 totaled to US$2.19 billion, increasing by 12.2% from its previous figure in 2019. Meanwhile, throughout the period of January to August 2021, its export levels soared by 30.8% year-on-year compared to 2020.

“This indicates that Indonesia’s furniture products are already competitive enough to perform well in the global market. Especially due to the fact that our furniture is seen as unique and innovative as a result of our producers finding innovative ways to stay competitive,” the Industry Ministry’s (Kemenperin) director-general for small, middle and miscellaneous scale businesses (IKMA) Reni Yanita said in Jakarta on Sunday (26/9).

Indonesia’s main furniture export markets include the United States, Japan, the Netherlands, Germany and the United Kingdom.

Through the Kemenperin, the government has been active in developing the furniture industry’s producers, especially the small-to-mid scale industries (IKM). The strategy prepared by the government was to encourage collaboration between IKMs and large-scale industries.

This method is part of their efforts to build a supply chain ecosystem in order to increase efficiency in the production process.

“To improve the ability of small industries to meet the criteria set by large industries or medium-scale industries as offtakers, we at the [Kemenperin’s] IKMA Directorate General have a monitoring program provided to small industry players that aim to improve the quality of products,” Reni explained.

In order to support furniture IKMs to increase their productivity and product quality, which can help spur the expansion of the export market, the Kemenperin currently operates a program to help restructure production equipment for IKMs. This effort is in line with encouraging IKMs to take advantage of the latest technologies.

“This restructuring program is in the form of giving discounts or reimbursements to IKMs that have purchased machinery and/or equipment within a certain period of time to support their production process,” Reni said.

Discounts will be given, which will be 25% of the purchase price for foreign-made (imported) machinery and equipment, and 40% of the purchase price for domestically-made machines.

“IKMs from all over the country are welcome to participate in this program, as long as they abide by the Kemenperin’s guidelines. We hope that this program can help encourage an increase in IKM production quality and help them increase their productivity and competitiveness as well,” Reni added.

In an effort to support the use of new technology through the restructuring program, acting IKMA director-general and the Kemenperin’s second inspector (Inspector II) along with the ministry’s director of food, furniture and building material IKMs Riefky Yuswandi made a working visit to furniture IKMs that have already received two restructuring program facilities.

Riefky explained that he had witnessed firsthand the application of the new machines and that he is confident that it would help increase the quality of the participating IKM’s products.

“This is in accordance with the policies set by the government, and can be an example for other industries as well,” he said.