Jakarta (Indonesia Window) – The Directorate General of Resilience, Spatial and International Industrial Access at the Ministry of Industry stated that the number and area of industrial estates in Indonesia continues to increase in the last five years.
In the last five years, the number of industrial estates has increased by 51.25 percent, while the areas have jumped by more than 17,000 hectares or by 47.35 percent.
“As of August 2020, as many as 121 industrial estates have been developed throughout Indonesia,” the Director General of Resilience, Spatial and International Industrial Access Dody Widodo said here Monday (Oct 12).
There are also an additional 14 industrial estates outside Java with an additional area of more than 9,000 hectares.
“The percentage of industrial estate areas outside Java is also higher than that in Java,” Dody noted.
Data on land sales in the industrial estate areas recorded by the Industrial Estate Association in 2019 showed that there were foreign investments from 42 companies with land requirements of 371.11 hectares, and domestic investments from 35 companies with land requirements of 50.27 hectares.
“In 2020 there will be other 20 foreign companies with land requirements of 61.82 hectares, and five domestic companies with land requirements 13 hectares,” Dody pointed out.
The increase in number and area of industrial estates in Indonesia is in line with the government’s plans to create a conducive investment climate by providing fiscal and non-fiscal incentives, including ease of business permits.
For example, Regulation of the Minister of Industry Number 45 of 2019 concerning Procedures for Granting Industrial Estate Business Permits and Industrial Estate Expansion Permits in the Framework of Electronically Integrated Business Licensing Services.
“The regulation is expected to make the business processes easier for investors to get permits so that they can increase investment in the industrial sectors,” he said.
Dody added, in supporting the national inclusive economy, the government is boosting the development of industrial estates in Java, which are focused on labor-intensive industrial sectors and high-tech industries.
Meanwhile, the industrial estates outside Java are more focused on natural resource-based industries, and are aimed at increasing the efficiency of the logistics system and driving the development of the estates as new economic centers.
“The development of new integrated economic centers is expected to have a maximum effect on national economic development,” he explained.
Moreover, along with the industrial era 4.0, the development of industrial estates will be more integrated with infrastructure, logistics, raw materials, human resources and research facilities so that they are more effective and competitive.
Reporting by Indonesia Window