Alcoholic beverage
industry is difficult to expand because the industry is included in the
Investment Negative List (DNI). The government proposes to provide licensing
relaxation in order to expand. As a result of the inclusion of this sector in
DNI, alcoholic beverage entrepreneurs cannot increase production capacity,
either improving the existing plants or constructing new plants. “Actually,
entrepreneurs want to make a great expansion, but do not get license, either
for expansion or construction of new plants”, said Benny Wahyudi, Director
General of Agro Industry of the Ministry of Industry in Jakarta (Monday, July
15).
Therefore, he process
licensing relaxation in the form of relaxation of license for alcoholic
beverage industry to expand. Licensing relaxation was considered highly
necessary because in addition to the domestic market consumption which is quite
high, export demand from Korea, Japan, and Australia is quite much. However,
what happens now is that demand cannot be met because it is hampered by
capacity issues. This resulted in many alcoholic beverages imported to
Indonesia. In fact, Benny continued, this industry in Indonesia is quite
capable.
Benny said that the
license stalled since 1996. Since then, beverage sector containing ethyl alcohol
is experiencing stagnant growth. In fact, according to him, there is economic
value and local wisdom in these beverages. Indonesian beverages products
containing ethyl alcohol was in demand by foreign markets. However, there is no
special capacity to meet export demand. According to him, if the overseas
market requested additional demand, domestic manufacturers could not meet it
because of limited production capacity. Therefore, licensing relaxation was
proposed again.
Benny said that one of
the requirements if the Investment Negative List is relaxed and there are
investors coming in, they have to get a license from the governor and the
regent where the industry is located. Foreign investors are also allowed to
enter as long as they partnered with local companies. Foreign companies are
also required to export their products so that local companies are not rivaled.
Consumption of
beverages containing ethyl alcohol in the country continues to increase. Data
of the Ministry of industry stated that in 2012 consumption stood at 263
million liters, up from 2011 at 255 million liters, and in 2010 at 245 million
liters. In 2012, import of beverages containing ethyl alcohol stood at 457,607
liters and in 2010 at 296,600 liters. The number is down from 2011 at 457,607
liters and in 2010 at 296,600 liters. Number of beer lovers is very large,
especially foreign tourist. He is optimistic that the business is able to
support tourism development. “But we cannot advantaged of that opportunity,
because alcoholic beverages are included in the Investment Negative List”, he
said.
Benny said that many
foreign investors are lining up to enter such as Jack Daniels and Johnnie
Walker. He saw a there were no new investment in this sector, the production
capacity of domestic alcohol beverages cannot cover the high growth of demand.
So, the steps taken are import. The Ministry of Industry is proposing that the
rules on Investment Negative List should be rather relaxed, with some of
proposed requirements.
Because the investment
tap is closed, Benny said, resulted in many alcoholic beverages imported to
Indonesia. There are many investment opportunity, but the rules do not allow.
Benny said that his party had proposed to the Investment Coordinating Board
(BKPM). It is estimated that the proposal has entered the Coordinating Ministry
of Economy. According to him, entrepreneurs hope that the revised Investment
Negative List can be accelerated so that investment license for alcoholic
beverages is not hampered by regulation. By looking at the huge opportunity, he
hopes that BKPM may reconsider the policy. (E)
Business News - July 17,2013
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