Enhancing Competitiveness in the Indonesian Pulp Industry: A Strategic Analysis and Value Chain Mapping Approach

Agustina Widi Palupiningrum; Citra Rapati; Rike Penta Sitio; Febrianto Arif Wibowo; Anggi Mayang Sari

doi:10.58915/aset.v4i2.2690

Authors

Agustina Widi Palupiningrum IPB University
Citra Rapati IPB University
Rike Penta Sitio PPM School of Management
Febrianto Arif Wibowo IPB University
Anggi Mayang Sari IPB University

DOI:

https://doi.org/10.58915/aset.v4i2.2690

Keywords:

Strategy, Downstream, Pulp and paper industry, SWOT, Value chain

Abstract

The pulp and paper sector plays a crucial role in the national economy, acting as a significant source of foreign exchange earnings within the non-oil and gas sector. Despite this, challenges remain in exporting, particularly in managing the high volume of upstream industry products (pulp) and optimizing downstream operations. There is still potential for improvement to enhance the added value through the processing industry of pulp derivatives. This study aims to analyze the current state of the pulp and paper industry in Indonesia, map the value chain of the paper industry, explore strategic issues pertaining to the pulp sector, and develop strategies to boost the competitiveness of the Indonesian pulp industry. Conducted using qualitative methods, this research relies on both primary and secondary data from various sources and literature. Data analysis employed the PESTLE, VRIO, and SWOT approaches. The findings indicate that the pulp industry plays a vital role in Indonesia’s economy, as demonstrated by various economic, social, and other indicators. Presently, the industry is concentrated in Sumatra and predominantly driven by foreign direct investment (FDI). The pulp (and paper) supply chain operates on a pull-based model, with supply chain actors including raw material suppliers, manufacturers, distributors, and consumers. The issue of downstream strategy is addressed by designing alternative strategies across the pulp industry value chain to enhance value capture. These alternative strategies advocate for improvements from the upstream sector and processes to the downstream, including regulatory policies, supply assurance, process efficiency, product differentiation, and diversification in line with market demand.

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