The Defense Industry BUMN held a Focus Group Discussion (FGD) under the theme of “Defense Industry Ecosystem & Improvement of Domestic Component Contenting”. The event was held virtually on Wednesday, June 30, 2021, was attended by speakers and participants from the Ministry of Industry, State-Owned Enterprises and Private-Owned Enterprises. The FGD was meant as an effort to develop national industry by increasing the domestic component content (TKDN), as well as a forum among SOEs private companies for better collaboration of SOEs and the private companies.
In his remarks on behalf of the organizing committee, PT PAL Indonesia (Persero) Production Director, Mr Iqbal Fikri, said that the FGD “Defense Industry Ecosystem & Domestic Component Content Improvement ” was aimed at developing the national defense industry that could increase the domestic component content value.
“In addition, it is our hope that it can improve the national economy along with the growth of domestic industry, the realization of independence and a forum for SOEa and the private companies in defense industry to collaborate, not just compete,” said Mr Fikri.
Meanwhile, in his presentation, the Acting Head of the Supervision and Control of the Use of Domestic Products (P3DN) of the Ministry of Industry, Mr. Mahardi Tunggul conveyed the programs and policies to increase the use of domestic products (P3DN). According to Mr Tunggul Tunggul, under several existing programs and policies, it is hoped that the big goal for increasing national utilization will eventually elevate industrial efficiency for better competition in the world market.
Apart from that, the national utilization is also expected to reduce dependence on foreign products through optimizing government spending.
“To increase the use of domestic products, in reference to the domestic component content requirement, companies must invest, be located, and produce in Indonesia and therefore they are automatically granted with an Industrial Business Permit (IUI),” said Mr. Tunggul.
The Alusista strengthening program carried out by the Indonesian Ministry of Defense is included in the top 10 expenditures for state ministries or institutions with the potential to increase the use of domestic products. Consequently this must be supported by the readiness of the domestic industry where the State-Owned Enterprises of the Defense Industry are the motor for the development of the domestic defense industry ecosystem.
Currently, the P3DN has a website that displays domestic products with their respective domestic component content values and a P3DN program that is directly supervised by the National P3DN Team.
“The domestic component content will have a higher value when the related materials and labor originate from domestic products. The Domestic component content of certification of goods has a validity period of 3 years. SOEs and private Companies engaged in the defense industry should make sure that their uncertified products are immediately certified, “said Mr Tunggul.
In view of the big target of strengthening the defense industry ecosystem, the Indonesian Ministry of Industry has also prepared several programs aimed at expanding business and elevating the production capacity of the defense industry. This was stated by Mr Immanuel T.H. Silitonga, Head of Sub-Directorate for Railway, Aircraft and Defense Equipment Industry of the Ministry of Industry.
“Some of these support programs include: 1) identification of industries that have the capacity as the Defense and Security Equipment industry (Alpahankam), 2) encouragement and increase of the domestic production, 3) synergy in R&D development of Alpahankam products and components, 4) human resource development for the defense equipment industry, 5) development of the Alpahankam raw material and component industry, 6) facilitation of fiscal incentives, 7) development of Indonesian National Standards (SNI), 8) development of industrial trees and maps of Alpahankam product components, 9) strengthening of component industry supply chains and raw materials for the defense industry,” explained Mr Silitonga.
In order to achieve a strong ecosystem, the entire defense industry must prepare and enhance their respective roles, both industries that act as lead integrators of main tools, industries of main or supporting components, and industries of supporting components or raw materials. Apart from that, strengthening the defense industry ecosystem is also expected to develop strategic and high-tech defense industry products that can involve more than one defense industry, to be done by conducting comprehensive guidance and regulation related to the participation of the national facilities and infrastructure industry. Supply chain reform and development of local industries, as supporting industries, need to be used as a reference to reduce dependence on imported goods.
This series of FGDs is a step for the Defense Industry SOEs to contribute more to the fulfillment of Defense and Security Equipment Tools (Alpalhankam) in a sustainable manner. Currently, the Defense Industry BUMN is in the process of becoming a Holding with the brand DEFEND ID (Defense Industry Indonesia). PT Len Industri (Persero) was appointed as a leader consisting of PT Pindad (Persero), PT Dahana (Persero), PT Dirgantara Indonesia (Persero) and PT Pal Indonesia (Persero). Under the vision of becoming an advanced, strong, independent, competitive and leading national defense industry in the world market, this Defense Industry SOE’s Holding is targeted to be finalized this year.