economy

LPEI Encourages SMEs In Central Java To Enhance The Competitiveness Of Their Products

Jawa Tengah is the fifth largest exporter in Indonesia, with a total of 2,261 exporters. The success of this achievement is largely due to the important role played by exporters, especially those from the Small and Medium Enterprises (SMEs) sector.

The Central Statistics Agency (BPS) records that Jawa Tengah currently has 1,897 exporters with export values below Rp50 billion, 296 exporters with export values between Rp50-500 billion, and 68 exporters with export values above Rp500 billion.

To further strengthen this contribution and support the growth of exporters in Jawa Tengah, the Indonesian Export Financing Institution (LPEI) recently held a meeting with leading exporters from Jawa Tengah at the "LPEI Export Forum 2024" event in Semarang, Jawa Tengah on Wednesday (3/7). The forum, with the theme "Exploring the Export Market for Leading Products from Jawa Tengah," was organized by LPEI in collaboration with the Directorate General of Financing and Risk Management of the Ministry of Finance, the Central Java Customs Office, and the Central Java Provincial Industry and Trade Office.

The distribution of exports from Jawa Tengah is dominated by several main commodities, such as non-knitted clothing and accessories (20.18%), knitted clothing and accessories (12.24%), footwear (11.01%), wood and wood products (9.98%), as well as furniture, lamps, and lighting equipment (7.20%). This diversification demonstrates Jawa Tengah's ability to produce various types of products that are in demand in the international market.The United States is the largest export destination for Jawa Tengah, contributing 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 Jawa Tengah exporters continues to increase, with 22.25% of them being loyal buyers. This indicates a strong trade relationship between Jawa Tengah and some of the world's largest economies, as well as the international buyers' trust in Jawa Tengah products.

LPEI supports the increase in business exports by providing facilities such as Business Matching to expand access to international buyers, both conventionally and digitally," said Maqin U. Norhadi, Director of Business Development Implementation.

Market Intelligence & Leads Management Chief Specialist LPEI, Rini Satriani, analyzed that the export growth of Central Java will remain stable until 2025, supported by several leading products. "Some products have significant export opportunities in 2024, such as Wood Products estimated to reach USD2.20 billion, Furniture products around USD2.30 billion, and Essential Oils for beauty products estimated to reach USD1.40 billion."At the same time, LPEI explained the facilities and support provided to export SMEs. Export SMEs can utilize various Special Export Assignment Programs (PKE) according to the existing export profiles/characteristics, including SME PKE (designed for export-oriented SMEs), Area PKE (for non-traditional target markets), and Trade Finance PKE (with trade transaction schemes).As of June 2024, LPEI has recorded disbursements of Area PKE facilities amounting to Rp4.247 billion with exports to more than 40 countries, Trade Finance PKE amounting to Rp8.187 billion with exports to more than 55 countries, and SME PKE up to Rp1.058 billion for export shares to more than 65 countries.One of the businesses that has utilized LPEI's PKE financing is Margono Paper, a manufacturer of fancy paper (colored patterned paper) with 90% of its products exported to 50 countries on 5 continents. Area PKE financing from LPEI has helped Margono Paper in expanding its business by adding export destination countries to non-traditional countries.Export Director of PT Margono Paper, Ferianti Chandranta, stated that Margono Paper needed additional working capital amidst the high demand for fancy paper worldwide.

Tag: Central Java Jawa Tengah LPEI PT Margono Paper Rini Satriani