Govt Accelerates Region-Based Industrialization by Strengthening SMEs

RRI.CO.ID, Jakarta - The Indonesian government is accelerating its region‑based industrialization strategy by strengthening small and medium‑sized enterprise (SME) hubs, with a focus on processing local commodities to increase their economic value.

The Industry Ministry is promoting the development of a Banana Processing SME Hub and a Weaving SME Hub in East Manggarai Regency, East Nusa Tenggara. The program aims to strengthen local value chains, create jobs, and broaden the economic base for local communities.

Industry Minister Agus Gumiwang Kartasasmita emphasized that a region‑based approach is key to building a sustainable and competitive industry.

“The Ministry continues to encourage local administrations to identify the potential of their SME centers so that industrial development can be carried out more effectively, on target, and to maximize sustainable growth in the sector,” Minister Agus said in a statement in Jakarta, as quoted on the ministry’s official website on Monday, July 6, 2026.

He added that the sustainability of SME hubs depends not only on infrastructure development but also on utilization and oversight.

“We are ensuring that SME hubs built with government support are truly capable of adding value to local raw materials, creating jobs, expanding market access, and improving community welfare,” he said.

East Manggarai is one of the recipients of the 2022 development program funded by the Special Allocation Fund (DAK) for the industrial sector. The region has significant potential to process bananas into value‑added products, including chips, flour, and other processed foods.

This initiative is also seen as part of efforts to accelerate downstream processing of local commodities such as bananas, corn, cassava, and sorghum. The government considers this approach crucial for strengthening national food security through region‑based production diversification.

“The development of the Banana Processing SME Center in East Manggarai Regency is a manifestation of the government’s commitment to accelerating the downstream processing of flagship commodities such as bananas, corn, cassava, sorghum, and other local products,” Minister Agus said.

He also highlighted the importance of keeping processing operations close to raw material sources to keep added value in the producing region.

“We need to develop intermediate products as close as possible to raw material hubs so that the added value is enjoyed by local communities and business operators,” he explained.

At the technical level, Director General of Small, Medium, and Miscellaneous Industries (IKMA) Reni Yanita said various facilities have been built in these hubs, ranging from production buildings to processing equipment. The infrastructure is expected to serve as a center for industrial activity and a learning hub for local businesses.

Reni emphasized the importance of strengthening governance, from mapping raw materials and partnering with farmers to implementing quality standards and product certification. She also highlighted the need for product diversification to ensure production resilience.

“The products produced must also meet market needs while taking into account aspects of quality, food safety, packaging, business legality, halal certification, and the unique identity of East Manggarai,” she said. ***