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Indonesia: Diversification of global supply chain to benefit Indonesia: DBS Group


At a virtual media briefing, John Laurens, Head-Global Transaction Services, DBS Group stated that Indonesia will benefit from the diversification of global supply chains as multinational companies are looking into ways to reduce reliance on China to manufacture their supplies following the outbreak of COVID-19. Lauren said companies will continue to diversify to low-cost markets like Vietnam, Bangladesh, India, Indonesia, as the pandemic has severely disrupted the global supply chains. It has also made some companies question their heavy reliance on China, while China’s ongoing trade war with the US has also burdened the industries with additional tariffs.

Taking advantage of this situation, Indonesian government has established a special task force to attract businesses leaving China and facilitate their relocation to Indonesia. On June 30, President Jokowi Widodo announced seven foreign companies had confirmed plans to relocate production facilities, mostly from China, to Indonesia. He added that 17 more were looking into opening facilities in the country. The relocation of seven companies is projected to bring $850 million to Indonesia while potentially employing around 30,000 workers, based on the Investment Coordinating Board’s (BKPM) estimates.