Strategic Analysis of Turbine Manufacturing Development in Achieving Required Local Content

Abstract

The government of Indonesia has set up an electricity development program of 35,000 Mega Watt (MW) to provide adequate electricity infrastructure so that the 100% electrification ratio can be achieved. The construction of the development of power infrastructure has implications for the demand for reliable electrical components, which supports upstream to downstream industries.  The turbine is one of the major components in electricity infrastructure which requires the supply of mechanical energy as the driving force. Despite its market potential, the turbine is a relatively high imported component, and this indicates the importance of fostering the development of turbine technology in Indonesia. The main objective of this study is to examine the capability of national turbine industries and research institutions in formulating policy recommendations to increase the use of the local content, called Tingkat Kemampuan Dalam Negeri (TKDN), in turbine manufacturing industries following the provisions stipulated in the Ministerial Decree No.54/M-IND/PER/03/2012 on Guidelines for Use of Products of State for Infrastructure Development in Electricity. This study applies SWOT and Balanced Scorecard, focusing on the analysis of capabilities of the turbine industry and identifying the mastery of turbine technology by various research and development institutions in Indonesia. The result of the study shows that the degree of BSC performance level in implementing the TKDN improvement strategy in the turbine industry is considered as less successful, therefore, short-term and long-term policy recommendation needs to be implemented to expedite the increase of TKDN.