Aluminium Downstreaming Business Development in Indonesia: a PESTEL and Stakeholder Mapping Approach

Abstract

Background: Downstreaming is an industrial strategy to increase value added from natural resources, and in Indonesia aluminium has strong potential due to large bauxite reserves and rising global demand, yet its downstream development remains constrained by limited alumina capacity and low diversification into higher value-added products.
Purpose: The study aims to provide a comprehensive understanding of how Indonesia’s aluminium business model can be strengthened by analyzing external factors influencing downstreaming development and mapping the roles of key stakeholders within the aluminium value chain.
Design/methodology/approach: The study employs a qualitative analytical approach by integrating PESTEL analysis to assess key political, economic, social, technological, environmental, and legal factors influencing aluminium downstreaming, alongside stakeholder mapping to identify actor roles, interests, and interrelationships within the industry ecosystem. Data are collected through desk studies, FGDs, and in-depth interviews, with findings synthesized to inform strategic and policy recommendations for strengthening Indonesia’s aluminium industry.
Findings/Result: The results show that government downstreaming policies, increasing global aluminium demand, and domestic bauxite availability support industry development. However, major constraints include high energy requirements, technological dependence, environmental compliance, and regulatory complexity. Stakeholder mapping indicates that effective coordination among government institutions, energy providers, investors, and local communities is essential.
Conclusion: This study concludes that integrated industrial planning, clean energy utilization, regulatory clarity, and stakeholder coordination are required to support sustainable aluminium downstreaming in Indonesia.
Originality/value (State of the art): This study applies an integrated approach combining PESTEL analysis and stakeholder mapping to provide a comprehensive assessment of external factors and actor interactions, offering a framework for policy and collaborative governance in Indonesia’s aluminium downstream industry.

Keywords: alumunium downstreaming, business development, industrial policy, PESTEL analysis, stakeholder mapping