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Balancing Gernas BBI and local component score for economic recovery

Balancing Gernas BBI and local component score for economic recovery

Visitors at the Proud of the Indonesian Products National Movement (Gernas BBI) exhibition in Ambon, Maluku Province, on November 29, 2021. (ANTARA PHOTO/GALIH PRADIPTA/rst)

Jakarta (ANTARA) - In the past two years, the government has pressed for prioritizing local products for household-level consumption under the Proud of the Indonesian Products National Movement (Gernas BBI) to support economic recovery amid the pandemic.

Moreover, the level of domestic component, or TKDN, also became another aspect that deserves attention. Industries are required to ensure that their products contain at least 25 percent of domestic materials.

Several industries catering to the people’s daily needs are expected to have a high TKDN score to have a wide-ranging impact on driving economic recovery in the country.

Overall, Gernas BBI is not just a movement to buy local products but also a campaign to buy local products, with a high TKDN percentage.

This includes the cosmetic and fashion industry and the information technology industry that currently have high demand in the market.

Minister of Trade Muhammad Lutfi is optimistic that the cosmetics and fashion industry would serve as one of the pillars of the Indonesian economy in future.

Hence, the government has encouraged local brands to commit to producing qualified products in order to compete with international brands.

Several newcomers in this sector have emerged despite the pandemic having had a major impact on the economy. One such example is the emergence of local cosmetics that have had a high demand amid the pandemic.

Brand Manager of Eusie Comestics Defita noted that her brand saw a huge gap and opportunity to work in the local cosmetic market sector.

Defita's company has prioritized added value in their products in the form of certificates from the National Agency of Drug and Food Control (BPOM), produced by a factory certified with Good Manufacturing Practice (GMP), and graded Excellent with Halal permit.

The brand was first introduced in early 2021 to the public as a cosmetic brand that is committed to offering qualified products by targeting several markets, such as Eusie Luxury Care, for skincare.

Another brand is Eusie Teen that helps to keep teenagers’ facial skin fresh and natural.

Eusie Baby Care is another brand that vouches to protect the skin of babies to keep it clean, safe, and healthy.

Defita noted that in 2021, Eusie Cosmetics had focused on introducing qualified products to the Indonesian people as well as collaborating with distributors and resellers, both in the online and offline market, as well as building a good sales infrastructure to form sound partnerships.

In 2022, Eusie Cosmetics aims to become one of the national brands that contribute to the economic recovery in Indonesia.

Related news: Ministry to push TKDN certification for 1,250 products in 2022
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Increasing the TKDN score

Meanwhile, local laptop manufacturer, PT. Zyrexindo Mandiri Buana Tbk, had produced hundreds of thousands of laptops, with TKDN, amid the pandemic to meet the needs of online education launched by the Ministry of Education and Culture during 2021.

The laptop manufacturer with Zyrex brand is emerging as one of the laptop manufacturers in Indonesia, with the highest TKDN value of more than 40 percent, based on Presidential Regulation Number 12 of 2021.

This local company is determined to expand, and in 2021, it had added four assembly production lines, thereby resulting in the company having eight production lines until now that have a production capacity of over 150 thousand units per month in order to meet the huge demand in a limited time.

As a result, in the third quarter of 2021, Zyrex managed to increase sales by 132 percent year-on-year, from Rp179.6 billion in 2020 to Rp415.4 billion.

Responding to the TKDN program, Zyrex President Director Timothy Siddik, noted that the TKDN program from the Increased Use of Domestic Production (P3DN) had a positive impact on the industrial ecosystem in Indonesia.

As a local laptop manufacturing brand, Siddik admits that TKDN is immensely beneficial not only for the company but also for other firms in the supply chain.

He also expressed optimism that the TKDN program would continue to be implemented and strengthened to develop the domestic industry.

Indonesia has profuse natural and human resources required to support the industrial sector. Indonesia is a nation with rich and abundant natural resources as well as the fourth-largest population in the world, with a market potential that continues to grow.

Products made in Indonesia are important in the development of a developed country.

In future, qualified local products are expected to increase public interest to buy domestic products, especially for the Information and Communication Technology (ICT) market, which is still dominated by imported products.

Pushing targets

To pursue the target of 30 million micro, small and medium enterprises (MSMEs) onboarding to the digital platform by the end of 2023, the government decided to continue the Gernas BBI movement on May 14, 2020, as directed by President Joko Widodo (Jokowi).

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan stated that collaboration has become the strength of Gernas BBI. To this end, the concept of the 2022 Gernas BBI will continue to be bolstered through collaboration with various stakeholders, including local governments.

Pandjaitan noted that in 2022, the government will apply the MSMEs harvesting program to assist MSMEs, with a minimum duration of three months in each province, with help from the regional government or the governor.

He also expressed optimism that this opportunity would be used by Bank Indonesia and Gernas BBI’s campaign manager to encourage investment for MSMEs in the region, help with promotional incentives, and encourage the use of the Digital MSME Credit (DigiKU) program from State-Owned Banks (Himbara) as a safe financing solution.

All sectors are optimistic of this concept being able to support the development of MSMEs as the backbone of the national economy by encouraging people to buy domestic products and driving industries to increase the TKDN score of their products.

Related news: TKDN for pharmaceutical industry to be increased to 55 percent
Related news: Ministry provides free TKDN certification for small, medium industry