Gappmi Warns Industrial Salt Shortage May Halt Food, Beverages Manufacturing

JAKARTA, investortrust.id – Indonesia’s food and beverage sector is facing an acute shortage of industrial salt, raising concerns about potential production halts among major manufacturers, the industry lobby group said. 

Adhi S. Lukman, chairman of the Indonesian Food and Beverage Producers Association (Gappmi), revealed that some producers are already struggling to secure adequate supplies. One multinational company, in particular, is at risk of shutting down operations if domestic industrial salt availability is not resolved.

“The company, which has been operating since the 1970s producing seasoning products and exporting globally, has indicated they may have to stop production due to the lack of salt,” Adhi said during a press conference at the Ministry of Industry in Jakarta on Wednesday, January 15, 2025.

Efforts to meet the demand for industrial salt through imports have stalled, as the government has imposed a ban under Presidential Regulation No. 126 of 2022 concerning the Acceleration of National Salt Development.

The regulation aims to bolster domestic salt production but has created immediate challenges for industries reliant on high-quality industrial salt.

Adhi warned that if the affected multinational company ceases production, the consequences would be severe, including the termination of 5,000 employees.

In addition to job losses, Adhi highlighted a potential ripple effect on Indonesia's economy. The company might resort to importing finished goods from its sister companies abroad to sustain operations. This shift would not only increase import dependency but also erode the local industry's value-added contributions.

“This is a significant loss for us. The value of the salt itself is minimal, but the added value from production is substantial. Now, imagine having to import finished products just because we lack this basic material,” Adhi remarked.

The food and beverage sector, one of Indonesia's largest contributors to GDP, relies heavily on consistent supply chains. Industry leaders are urging the government to revisit its policies to ensure a balanced approach to supporting domestic production while maintaining industrial competitiveness.