Five Key Industries with Strong Potential in 2025

Several industries in Indonesia are projected to experience significant growth and increasing demand, both domestically and internationally, by 2025. Experts and business analysts in Indonesia have highlighted key sectors expected to thrive.

One such expert, Djoko Kurniawan, Senior Business Consultant and Business Analyst at DK Consulting, predicts that the chemical industry will see substantial expansion due to the need for innovative products. These include everyday essentials like toothpaste, soap, detergents, and cleaning agents.

“This industry will continue to grow in line with the demand for chemicals used in household and other product categories,” Djoko stated on Monday (January 6, 2025), as reported by kilasjatim.com.

Djoko also emphasized that President Prabowo Subianto’s food self-sufficiency program will further drive the chemical sector’s growth, especially with increased demand for fertilizers and pesticides. This initiative presents a significant opportunity for the industry.

Bright Prospects for the Pharmaceutical Sector

Djoko pointed to the pharmaceutical industry as another promising area. Growing public awareness about the importance of health has sustained the demand for both modern and traditional medicines.

“Take the pandemic as an example. The pharmaceutical industry experienced rapid growth as the need for medicines and supplements skyrocketed. Now, people are more proactive; when they feel unwell, they immediately buy medicines or supplements to prevent worsening conditions,” Djoko explained.

Opportunities in Textiles and Metals Industries

Andry Satrio Nugroho, Head of the Center for Industry, Trade, and Investment at INDEF, highlighted the textile industry as another sector with great potential, even amid global market uncertainty caused by the US-China trade war.

“Tensions between the US and China open opportunities for Indonesia. If we can seize this momentum, investments from China are likely to flow into our textile and garment sector,” said Andry.

Andry added that foreign investment in Indonesia’s textile sector could compensate for the decline of domestic players who faced challenges in recent years.

Meanwhile, the basic metals industry also shows strong potential, supported by the government’s downstreaming initiatives. Andry noted the sector’s consistent double-digit growth in recent years. However, he advised expanding beyond the initial stages of downstreaming, as reported by kabarbisnis.com.

“For instance, nickel downstreaming currently focuses on refining or smelting. We hope to advance further to produce stainless steel and battery packs,” Andry suggested.

Automotive Industry Growth Predicted

According to Jongkie Sugiarto, Chairman of the Association of Indonesian Automotive Industries (Gaikindo), the automotive industry is set to grow in 2025 despite the Value-Added Tax increase to 12%.

The combined sales of battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) from January to November 2024 captured a market share of 11.6%.

To further boost the hybrid vehicle market, the government has introduced incentives for BEVs, including a 10% VAT discount for imported completely knocked-down (CKD) electric cars.

“The government’s incentive policy for hybrid vehicles is excellent news. It is expected to rejuvenate and stimulate the Indonesian automotive industry,” said Yohanes Nangoi, Chairman of Gaikindo, as reported by antaranews.com.

These incentives align with the government’s efforts to promote Low Carbon Emission Vehicles (LCEVs) to reduce dependence on fossil fuels and achieve carbon neutrality by 2060. Moreover, they aim to enhance the competitiveness of Indonesian-made vehicles and expand their presence in the domestic market.

 

Source: kilasjatim.com, kabarbisnis.com, antaranews.com

Special Image credit: Ministry of Industry

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