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Becoming More Competitive in Tenders with TKDN

TKDN stands for Domestic Content Level, which is a measure or percentage of the value or components of a product or service produced within a country. This reflects the extent of local contribution to a product or service, both in terms of raw materials, labor, and added value generated domestically.

TKDN is usually used as an indicator to measure how independent a country is in producing the goods and services needed, as well as to encourage the development of local industries. In many countries, governments often implement policies or regulations that require a minimum TKDN level for certain products, such as electronics, motor vehicles, or telecommunications equipment.

TKDN can be calculated in various ways depending on the sector or industry involved. Generally, TKDN is calculated as the percentage of the value of products or services originating from within the country compared to the total value of the products or services. This may involve assessing components such as raw materials, labor, technology, or other components that contribute to the final value of the product or service.

SUCOFINDO Free TKDN Certification

In assisting industries in Indonesia to further develop and continue to utilize local instruments in manufacturing products and/or services, SUCOFINDO offers Free TKDN Certification services. This offer is valid until November 10, 2024. For Small Industry players (with business capital outside of land and buildings amounting to more than 1-5M) and Medium Industry players (more than 5M-10M), they can view the terms and conditions as well as the required documents on the official SUCOFINDO website, or they can directly click the link below:

How Can TKDN Help Companies in Tenders? TKDN (Domestic Content Level) certificate is official evidence that a product or service has a high domestic contribution in terms of value, raw materials, and labor. In the context of tenders or project procurement, having a TKDN certificate can provide several benefits for companies:

  1. Meeting Tender Requirements: Many government or private institutions set TKDN requirements as part of the qualifications for submitting bids in tenders. By having a valid TKDN certificate, companies ensure that they meet the requirements to participate in the tender process.
  2. Increased Evaluation Value: In some cases, tenders give additional value to participants with high TKDN levels. By having a TKDN certificate that shows a significant local contribution to their products or services, companies can increase their scores in tender evaluations, thus enhancing their chances of winning contracts.
  3. Demonstrating Commitment to Local Development: TKDN certificates also reflect the company’s commitment to developing the local industry. This may be seen positively by procurement agencies, especially if there are policies or goals supporting regional economies.
  4. Accessing Specific Projects: Some projects or industry sectors may give preference to companies with high TKDN levels. By having a valid TKDN certificate, companies can more easily access these projects and enhance their business opportunities in specific sectors.
  5. Building Reputation and Trust: Having a TKDN certificate can enhance the company’s reputation as a socially responsible player and support local economic development. This can strengthen relationships with clients, business partners, and other stakeholders.
  6. Reducing Risks and Costs: By prioritizing local raw materials and labor, companies can reduce risks associated with price fluctuations and availability, as well as high transportation and logistics costs associated with imports.

Thus, TKDN certificates can be a crucial factor in a company’s tender strategy, helping to meet requirements, increase competitiveness, and expand business opportunities in competitive markets.

Benefits of TKDN

In addition to helping companies become more competitive in tenders, TKDN has several other significant benefits for a country and its industry. Here are some key benefits of TKDN implementation:

  1. Driving Local Industry Development: TKDN helps drive local industry growth by encouraging the use of domestic resources, including raw materials, labor, and local infrastructure. This creates opportunities for domestic companies to grow and compete in international markets.
  2. Creating Jobs: By promoting the use of local labor and the growth of domestic industries, TKDN can help create new jobs. This contributes to increasing income and the welfare of the population.
  3. Reducing Dependency on Imports: By increasing the share of domestic production in the supply chain, TKDN helps reduce dependence on imports, especially for key products such as technology, equipment, and raw materials.
  4. Strengthening Economic Sovereignty: By strengthening local industries, TKDN helps enhance a country’s economic sovereignty. This makes the country more self-sufficient in meeting domestic needs and more resilient to fluctuations in the global market.
  5. Driving Technological Innovation: TKDN encourages the development and use of domestic technology, as companies need to find local solutions to meet TKDN requirements. This stimulates technological innovation and accelerates the progress of local industries.
  6. Providing Higher Quality Standards: By increasing supervision and control over domestic production processes, TKDN can help improve product quality standards. This strengthens the reputation of the local industry in the international market.
  7. Increasing State Revenue: By increasing the contribution of domestic industries to the economy, TKDN can also increase state revenue through taxes, royalties, and other contributions.
  8. Strengthening Global Competitiveness: Through investment in local capacity and product development, TKDN can help domestic companies compete better in the global market, thereby increasing their bargaining power in international trade.

Overall, TKDN provides a strong foundation for sustainable economic growth, strengthens economic resilience, and helps achieve a country’s long-term development goals.

For more information about inspection and audit services and the Wholesale and Retail Trade Sector, you can read our article here. If you and your company need further information regarding our services, please contact and consult with us here.

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