Government Driving Upstreaming Efforts for Regional Rubber Industries

Jakarta – The Indonesian government, through the Industry Ministry (Kemenperin), is driving upstream programs for rubber products through diversification efforts for products deemed to have high competitiveness value. 

Such efforts are done in order to push the rubber processing industry to become more productive, be them on the micro, small, medium or large scales. 

To support upstreaming efforts of rubber products in Jambi, the Kemenperin’s industry regulations and standardization body (BSKJI) have signed a partnership memorandum with the Jambi provincial government regarding the implementation of industrial technologies for Jambi’s leading commodity sectors. 

According to the Kemenperin’s BSKJI head Doddy Rahadi, this partnership is crucial in establishing a proper, collaborative ecosystem that could help drive the growth of Jambi’s rubber industry. It could also serve as a pilot project for the development of leading commodities in other regions as well. 

“Improving the rubber industry’s upstreaming efforts can be done through effective optimization of industrial technologies in the creation of rubber products such as footwear, vulcanized tires, rubber compounds, rubber for mining purposes, rubber for domestic purposes and rubber for automotive production purposes,” Doddy said through a statement on Friday (5/3). 

Indonesia is able to produce 3.5 million tons of rubber as of 2020. Jambi is one of the country’s major production and cultivation provinces. The province provides up to 10% of all-natural rubber production in Indonesia, after South Sumatera, North Sumatera and Riau. Despite this, only 21% of produced rubber was utilized for domestic use, and the rest was exported in the form of ribbed smoke sheets, crumbed rubber and concentrated latex. 

As part of the partnership, the Kemenperin’s industry research and standardization body (Baristand) in Palembang, South Sumatera have intensively aided and transferred technology to aid Jambi’s rubber processing industry.  

Kemenperin’s Palembang Baristand head Syamdian explained that the first steps taken was to assist micro, small and medium scale businesses (UMKM) that produce concentrated latex in the Muhajirin, Muara Jambi district and rubber processing UMKMs in the Sarolangun district. 

These efforts are considered as the pilot projects for rubber upstreaming efforts in smaller regions and clusters. The program involves purchasing raw rubber materials produced by local rubber farmers and later processing them into brown crepes to be made into rubber compounds or rubber products.   

Aside from guidance programs, the Kemenperin’s Palembang Baristand is also actively providing consultation on UMKM growth and is designing a proper UMKM development roadmap that will run until 2023 with a target of producing more vulcanized tires, vulcanized rubber compounds, rubber for automotive production purposes, rubber for domestic purposes and rubber for mining purposes. 

“In 2021, our focus is to produce footwear, rubber mats and more rubber compounds, all of which have already begun production with help from our program,” Syamdian said. 

To accommodate the Baristand’s operations, the Bank Indonesia representative office in Jambi is providing financial assistance for the UMKMs as well. 

“Bank Indonesia will provide UMKMs with technical training on financial management and will also help funding issues, in line with the relevant regulations regarding this matter,” Syamdian elaborated.