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IOL News
10 hours ago
- Automotive
- IOL News
BRICS+ Series: Indonesia Joins the World's Top 10 Manufacturing Nations
This handout picture taken and released on July 3, 2024 by the Indonesian Presidential Palace shows Indonesian President Joko Widodo (R) speaking with Hyundai Motor Group Executive Chairman Chung Eui-sun (C) during an inspection of the battery and electric vehicle manufacturing plant by PT Hyundai LG Indonesia-Green Power in Karawang, West Java. Indonesia's Manufacturing Global Ambitions The manufacturing sector constitutes a significant portion of Indonesia's economy, contributing 20% to the GDP and thereby playing a pivotal role in the nation's economic advancement. The majority of manufacturing operations are concentrated on the island of Java, which is home to 60% of the national population and generates 58% of the country's revenue. Indonesia's Manufacturing Growth & Key Sectors Overall, Indonesia's manufacturing sector has demonstrated consistent positive growth of 4% since 2016, despite the COVID-19 setbacks from the lockdown regulations, today the industry is ranked as the 12th largest manufacturer globally; and by 2030 the government has plans to elevate the country into the top 10 biggest economies and aiming to become a global manufacturing hub according to the Making Indonesia 4.0 strategy. One of the main areas of production include textiles, chemicals, electric vehicles (EVs), and food processing. Currently, manufacturing makes a major contribution as a source of employment, with the expansion of production, Indonesia stands to play an increasingly critical role in the various small and medium-sized enterprises which represent the majority of the sector. Government Initiatives: Making Indonesia 4.0 & Investment Attraction In order to achieve government-mandated goals such as manufacturing contributing 28% to GDP by 2045, there have been efforts to attract foreign investment for companies to operate in Indonesia's manufacturing hubs, thus supporting the increased market presence in the global supply chain. The country's geographic location is greatly beneficial in this capacity because of the Strait of Malacca- a vital channel for trading routes connecting the Pacific Ocean to the Indian and the South China Sea. BRICS+ Membership: Opportunities & Trade Expansion Following Indonesia's recent membership to BRICS+, the proximity the country has to the popular sea route makes for increased commercial activity which boosts the country's shipping, port and other coastal services. It is significantly important for its strategic geopolitical and economic characteristics, but also for security measures. By virtue of the BRICS+ bloc representing a large market, Indonesian membership could significantly increase the volume of trade flowing through or into the country. Secondly, aligned with the bloc's founding values, they seek to reshape the global economy and world order by ensuring that emerging markets and countries have a greater more equitable voice in international affairs, Indonesia has a great opportunity to influence sea trade interests, commodity pricing and global trade policies, especially considering that they recently had a trading surplus in February 2025 increasing to $3.12 billion (USD), a substantial raise from $0.83 billion the year before. Key Trade Partners & South-South Cooperation Some of the top exporting destinations that Indonesia trades with are China, the USA, India, Japan and Singapore. The top importing countries are China, USA, Japan, South Korea and Singapore. This is to potentially change because of the BRICS+ agenda promoting greater South-South cooperation to foster economic exchange and growth. China and India pose the greatest strengths in this capacity regarding the BRICS nations. China is recognised as the world's leading manufacturing nation, possessing substantial expertise in restructuring the global supply chain to be heavily centered around its operations. Furthermore, both China and India, the latter being the most populous country globally, possess vast consumer markets attributable to their large populations. India is home to a rapidly growing middle class and thus, increasing purchasing power- pivotal to the BRICS+ bloc financial cycle. Complementing this is New Delhi's robust service, telecommunications and information technology (IT) industries whose expertise can be great collaboration avenues to Indonesia for skill transfers. Challenges & The Road Ahead Indonesia aims to be a leader in manufacturing automation technologies. However, its current lack of skilled workers and infrastructure will need to be addressed to reach this goal. Recent data indicates that Indonesia's manufacturing growth is moderating. In March 2025, Indonesia's Manufacturing Purchasing Managers' Index (PMI) declined to 52.4 from 53.6 in February, signaling that while the sector is still expanding, the pace has slowed. However, foreign demand remains strong amidst rising input costs and the current volatility of international trade with the ongoing tariff wars initiating from the USA could host broader economic implications on future growth. Indonesia's strategic decision to diversify its international presence through BRICS+ membership significantly enhances the nation's prospects for realising its global manufacturing ambitions. This alliance presents opportunities to foster collaborative partnerships, bolster economic sovereignty by mitigating import dependency on raw materials, and solidify Indonesia's standing as a prominent industrial force on the world stage. Written by: *Dr Iqbal Survé Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN *Banthati Sekwala Associate at BRICS+ Consulting Group Egyptian & South African Specialist **The Views expressed do not necessarily reflect the views of Independent Media or IOL. ** MORE ARTICLES ON OUR WEBSITE ** Follow @brics_daily on X/Twitter & @brics_daily on Instagram for daily BRICS+ updates
Korea Herald
25-03-2025
- Automotive
- Korea Herald
Hyundai Steel anchors US auto supply chain with $5.8b plant
Steelmaker to counter import tariffs with first plant in Lousiana Hyundai Steel, Hyundai Motor Group's steel manufacturing subsidiary, vowed Tuesday to invest $5.8 billion in building its first US plant in Louisiana as part of the Korean auto giant's strategy to complete a local vehicle supply chain. The electric arc furnace steel plant, the first of its kind in the US, is set to begin commercial production of automotive steel sheets by 2029, boasting an annual production capacity of 2.7 million metric tons. Compared to traditional blast furnace facilities, it minimizes carbon emissions by up to 75 percent. It will include facilities for direct reduced iron and hot-rolled and cold-rolled steel sheets. The facility — strategically located near Hyundai Motor's Alabama plant, Kia's Georgia plant and the newly opened Hyundai Motor Group Metaplant America in Georgia — will primarily supply steel sheets for Hyundai and Kia vehicles, as well as other US automakers. The company also plans to extend its market reach to Latin America, including Mexico and Brazil, and Europe. Legacy US automakers — namely, General Motors and Ford Motor Company – have traditionally located their manufacturing facilities in the Rust Belt, encompassing parts of the northeastern and midwestern US. However, global brands, including Hyundai Motor Group, have increasingly chosen southeastern states as their key location for new plants. Hyundai Steel's commitment to the US market is part of Hyundai Motor's $21 billion investment in the US over the next four years, announced Monday by Hyundai Motor Group Executive Chair Chung Eui-sun alongside US President Donald Trump and other officials at the White House in Washington. Industry insiders say that the steelmaker's Louisiana base will be a strategic foothold for Hyundai Motor and other global car manufacturers to boost their US operations. This is mainly due to Trump's imposition of a 25 percent tariff on steel imports, which will boost domestic demand for US-made automotive steel. 'We can achieve stable profits in the US largely driven by robust steel demand, high prices and significant growth potential,' stated Hyundai Steel. 'Additionally, lower energy costs such as natural gas and electricity compared to Korea, along with reduced logistics expenses, offer advantages in maintaining cost competitiveness.' Leveraging its global brand recognition, the company stressed that it could also attract new customers for Korean-made products by creating synergies with its domestic production bases in Dangjin, South Chungcheong Province, and Suncheon, South Jeolla Province. To secure stable funding for the investment while enhancing the competitiveness of its US steel business, Hyundai Steel is in talks with Hyundai Motor for joint investment. It is also considering equity investment with strategic partners. With over 70 years of expertise in electric arc furnaces, Hyundai Steel produced approximately 1 million tons of automotive steel sheets from 2007 to 2010. In October 2022, the company achieved a significant milestone by successfully conducting the world's first trial production of a 1.0 gigapascal-class carbon-reduced high-grade plate using an electric arc furnace. Higher gigapascal values indicate greater hardness, which is becoming increasingly important in the eco-friendly vehicle market, as the integration of batteries and advanced equipment has led to the growing use of high-strength steel.
