With Indonesias lubricant manufacturing capacity twice as high as domestic demand, and with imports from within the Asean Economic Community increasing, the countrys Ministry of Industry will encourage exports to Asia and Europe, according to a local news websites report on an official’s statement.
Indonesias consumption of lubricants is expected to reach about 752,000 metric tons this year, meaning the approximately 33 Indonesian and foreign blenders in the country have capacity to produce around 53 percent more supply than is required for in-country use, Ministry of Industry official Achmad Sigit Dwi Wahjono reportedly told Bisnis.com recently. Furthermore, as trade barriers between the 10-country Association of Southeast Asian Nations are relaxed through policies of the new AEC, imports could rise and exacerbate the overhang.
To compete with increased imports, it is imperative that locally produced lubricants meet the Indonesian National Standard (SNI) set to be implemented later this year, he added, noting that around 80 percent of manufacturers have already secured SNI certification.
The mark of high quality also enhances the appeal of the products in foreign markets, he said. The ministry said that by the end of the year, local suppliers will sell products not just to ASEAN member states but also to China, the Middle East, South Korea, Japan and Europe. Until now, the level of lubricant exports from Indonesia has been very low.