Coconut Briquette Factory Phenomena in Indonesia

Coconut Briquette Factory: Not a Blessing in Disguise?

Small Indonesian Map

In Indonesia, there is a phenomenon where many Indonesians are trying to sell coconut briquettes. Coconut shell charcoal has been labeled by “exporter influencers” as ‘black gold’ due to its abundant natural resources, presenting a significant opportunity for Indonesians to transform this resource into higher value products like coconut briquettes. Influenced by the success of these influencers, many Indonesians are now attempting to manufacture and sell coconut briquettes, which are widely used for shisha charcoal. Additionally, more Indonesians are opening coconut briquette factories, particularly on Java and Sumatra islands. This is seen as a blessing in disguise for many Indonesian entrepreneurs. The number of young people who smoke shisha in Europe and the Middle East is expected to increase in the future, clearly presenting an opportunity for Indonesian entrepreneurs to fulfill this growing demand.

Indonesian coconut shell charcoal is known for its distinctive qualities, such as low ash content, white ash after burning, and high carbon content. These unique characteristics are rarely found in abundance in other coconut-producing countries like Thailand, India, and Vietnam. Consequently, more Indonesian entrepreneurs are opening coconut briquette factories. This is indeed a blessing in disguise for Indonesian entrepreneurs to utilize this resource. However, opening a coconut briquette factory requires substantial capital, which is challenging for small Indonesian entrepreneurs.

This gap presents a significant opportunity for foreign entrepreneurs who have ample capital. The Indonesian currency is one of the weakest in the world compared to the US dollar, and the Indonesian minimum wage is one of the lowest among Asian countries. With abundant capital, a young workforce, and a cheap currency, foreign investments are targeting this business.

A Critique for the Indonesian Government

One of Coconut Briquette Factory in Indonesia

The Indonesian government is quite pleased with the increasing number of foreign investments. These foreign entrepreneurs usually come from countries such as Germany, Iraq, Lebanon, Australia, and Saudi Arabia. Without a doubt, this investment brings positive economic impacts by absorbing the workforce, circulating more money within Indonesia, and bringing foreign currency into the country. At first glance, it appears very exciting and positive. However, from the perspective of Indonesian entrepreneurs, the situation is not favorable. Most of these foreign investors have established markets to sell these coconut briquettes in their home countries, which is their strongest advantage.

The Indonesian government must intervene in this situation to help small Indonesian entrepreneurs. I don’t oppose foreign investment, but I believe this situation must be regulated to protect small Indonesian entrepreneurs. The coconut briquette factory business is lucrative, and collaboration between these two parties must be addressed carefully and fairly to create a healthy and fair business environment.