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Jakarta, July 10, 2024 - Occupying the fifth largest position in Indonesia in terms of the number of exporters, Central Java is not only a production center but also a significant economic driver through the export sector. This success is inseparable from the important role of exporters, especially those from Small and Medium Enterprises (SMEs).
The Central Bureau of Statistics (BPS) notes that Central Java currently has 2,261 exporters with details of 1,897 exporters with export values below IDR 50 billion, 296 exporters with export values of IDR 50-500 billion, and 68 exporters with export values above IDR 500 billion.
To further strengthen this contribution and support the growth of exporters in Central Java, the Indonesian Export Financing Agency (LPEI) again held a meeting with leading exporters from Central Java at the "LPEI Export Forum 2024" event in Semarang, Central Java on Wednesday (3/7). The forum with the theme "Examining the Export Market for Central Java's Featured Products" was organized by LPEI in collaboration with the DJPPR Ministry of Finance, Central Java Customs, and the Central Java Provincial Department of Industry and Trade.
Central Java's export distribution is dominated by several main commodities, such as clothing and non-knitted accessories (20.18%), clothing and knitted accessories (12.24%), footwear (11.01%), wood and wood products (9.98%), and furniture, lamps, and lighting equipment (7.20%). This diversification demonstrates Central Java's ability to produce various types of products that are in demand in international markets.
The United States is the largest export destination country for Central Java with a contribution of 30.43%, followed by China (7.66%), Japan (6.51%), Singapore (6.49%), and the Netherlands (5.6%). In addition, the number of buyers collaborating with Central Java exporters continues to increase, with 22.25% of them being loyal buyers. This shows strong trade relations between Central Java and several of the world's largest economies and international buyers' trust in Central Java's products.
"LPEI supports the increase of exporters' businesses by providing facilities such as Business Matching to expand access to international buyers, both conventionally and digitally," said Maqin U. Norhadi, Managing Director of Business Development.
LPEI Market Intelligence & Leads Management Chief Specialist, Rini Satriani, analyzes that Central Java's export growth will remain stable until 2025, supported by several featured products. "Some products have significant export potential in 2024, including Wood Products estimated to reach a value of USD 2.20 billion, Furniture products valued at USD 2.30 billion, and Essential Oils for beauty products estimated to reach USD 1.40 billion."
On the same occasion, LPEI explained LPEI's facilities and support to export SMEs. Export SMEs can take advantage of various Special Export Assignment (PKE) programs according to existing export profiles/characteristics, including SME PKE (designed for export-oriented SMEs), Regional PKE (for non-traditional destination markets), and Trade Finance PKE (with trade transaction schemes).
As of June 2024, LPEI has recorded disbursements of Regional PKE facilities amounting to IDR 4.247 billion with exports to more than 40 countries, Trade Finance PKE amounting to IDR 8.187 billion with exports to more than 55 countries, and SME PKE up to IDR 1.058 billion for export shares to more than 65 countries.
One of the businesses that has utilized LPEI's PKE financing is Margono Paper, a fancy paper (colored patterned paper) producer with 90% of its products exported to 50 countries on 5 continents. LPEI's Regional PKE financing helps Margono Paper develop its business by adding export destination countries to non-traditional countries.
PT Margono Paper Export Director, Ferianti Chandranta, said Margono Paper needed additional working capital amid high global demand for fancy paper. The Covid-19 pandemic caused fancy paper factories in Europe and China to close. This opened opportunities for Margono Paper to expand exports to new countries and sustainable exports.
"LPEI comes with various products that can help export-oriented businesses. LPEI financing support can increase the company's competitiveness to penetrate the global market, including exports to non-traditional countries. With very competitive interest rates, we can smooth cash flow and add capital to buy raw materials, ultimately driving company innovation by adding other product variations," said Ferianti.
Separately, LPEI also held a meeting with SMEs in Yogyakarta on July 6, 2024. The meeting, which was also attended by the management of the Central Java Provincial Chamber of Commerce, aims to prepare SMEs and exporters to enter the digital platform being prepared by LPEI.
"LPEI has a strong commitment to helping Indonesian local products penetrate the international market and encouraging various Indonesian commodities to be bold in going global. Through the Coaching Program for New Exporter (CPNE) and Desa Devisa, LPEI continues to provide assistance and create new exporters and strengthen the export ecosystem. LPEI is currently preparing a marketplace specifically designed for ease and service availability within the export ecosystem, which is expected to encourage export-oriented businesses to dare to go global," said Maqin.
Furthermore, Maqin explained that this marketplace helps SMEs to improve their export performance by utilizing data-driven research and digital technology in their export decision-making. Through this digital breakthrough, LPEI also encourages Central Java's leading exporters to develop the training programs they and their teams need. The results of this research also help policymakers and regulators to refine the SME export ecosystem, etc. The study results can also be expanded to other developing countries with similar economic structures and legal systems.
Media Liason:
Chesna F. Anwar
Corporate Secretary – Indonesia Eximbank
Ph.: (021) 39503600
Email: corpsec@indonesiaeximbank.go.id
Web: http://www.indonesiaeximbank.go.id
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