Raw Material Supply Centers as the Initial Foundation of the Commodity Balance

The Ministry of Industry (“ Kemenperin ”) is currently drafting Regulation of the Minister to govern the management of imports through Raw Material Supply Center (Pusat Penyedia Bahan Baku- “ PPBB ”), which is targeted for completion this year. This policy is designed to establish PPBB as the initial foundation for the development of the national Commodity Balance (Neraca Komoditas- “ NK ”).

“This is the genesis of the PPBB, which will serve as the foundation for building the NK in the future,” said Reni Yanita, Director General of Small, Medium, and Various Industries at the Ministry of Industry.

Unlike the current NK mechanism, which covers a limited range of commodities, the PPBB is designed to be open to all commodities, using an approach based on meeting the supply and demand needs of the industry.

Furthermore, Reni explained that, until now, independent import activities have been dominated by large industries holding a Producer Importer Identification Number (“ API-P ”). Through the PPBB scheme, holders of a General Importer Identification Number (“ API-U ”) will be empowered to allocate raw material imports specifically for Small and Medium-Scales Industries (Industri Kecil Menengah- “ IKM ”).

To ensure the effectiveness of the policy, the Government will implement a strict verification mechanism for API-U holders and the IKM they serve, to ensure that imported raw materials are genuinely used in the production process and are not redistributed to the open market.

In its implementation, the PPBB will function as a stock provider, ensuring certainty of quantity and quality for IKMs, thereby maintaining the continuity of the production process. API-U holders designated as PPBB must serve at least five IKMs that have entered into cooperation agreements, in order to ensure that the distribution of imported raw materials is carried out more effectively and accurately.