The Indonesian government is ramping up efforts to bolster the nation's air conditioner (AC) exports, aiming for a remarkable target of 10 million units annually. This ambitious initiative was announced by Vice Minister of Industry Faisol Riza during the pre-opening of PT LG Electronics Indonesia's latest AC manufacturing facility in Cibitung, Bekasi, West Java, on Wednesday, April 16, 2025.
With global demand for air conditioners soaring to an astounding 2 billion units, Riza emphasized that even a target of 10 million units would only scratch the surface of worldwide needs. "The government wants AC exports to increase to 10 million units every year. The global demand for ACs reaches 2 billion units. If we export 10 million, it’s still nothing compared to the world’s total demand," he stated, highlighting the significant growth potential for Indonesia's AC industry.
Currently, Indonesia's domestic AC sector has already made strides in exporting products to various markets, including the Middle East, Fiji, Papua New Guinea, and several ASEAN countries. This export push is part of a broader strategy to enhance the global competitiveness of Indonesian electronics.
Despite these promising developments, Riza acknowledged that the industry faces ongoing challenges, particularly the reliance on imported components. "Dependence on imported components remains a challenge for the AC industry in Indonesia. Therefore, we need to strengthen the local AC component industry so that the supply for the downstream industry is no longer reliant on imports," he explained.
To address this issue, the government is actively encouraging PT LG Electronics Indonesia to manufacture key components locally, such as compressors. This move aims to bolster national independence and supply chains, reducing reliance on foreign imports.
In 2024, Indonesia's AC imports stood at a considerable USD 420.46 million, marking a 9% decrease from the previous year but still representing a significant expenditure. "We hope that the new LG AC factory can reduce dependence on imports, meet domestic market needs, and also increase export markets," Riza added.
LG Electronics Indonesia, celebrating its 35th anniversary in the country, is committed to enhancing its operations and production capabilities. President Ha Sang-chul announced the company's readiness to operate the new AC factory, which is set to become a key player in the local manufacturing landscape.
The new facility, located in Cibitung, will occupy an area of 32,000 square meters and represents an initial investment of USD 22 million (approximately IDR 374 billion). The factory is expected to have an initial production capacity of around 1.8 million AC units in its first year, with plans to double that capacity in subsequent years.
"This is a strategic investment that solidifies our evolution in creating jobs and leading the manufacturing process locally," Ha Sang-chul stated. He assured that LG would maintain the same high-quality standards applied across all its global facilities, including stringent quality control measures at every production stage to ensure maximum performance, energy efficiency, and reliability.
The pre-opening ceremony was attended by notable figures, including the Deputy Ambassador of South Korea to Indonesia, Park Soo-deok, the Deputy Regent of Bekasi, Asep Surya Atmaja, and the Director of Electronics and Telematics Industry at the Ministry of Industry, Ronggolawe Sahuri. Their presence underscored the significance of this investment for both local and international stakeholders.
As Indonesia continues to navigate the challenges and opportunities in the global electronics market, the government’s push for increased AC exports and local component production is a clear signal of its commitment to fostering a self-reliant and competitive industrial landscape. The establishment of LG's new factory is not just a milestone for the company but also a pivotal moment for Indonesia's broader economic ambitions.
In summary, the Indonesian government is setting the stage for a robust growth trajectory in the AC sector, with LG Electronics at the forefront of this initiative. By enhancing local production capabilities and reducing import dependence, Indonesia aims to not only meet domestic demands but also carve out a significant share of the global AC market.
