Indonesian government prepares Subang Regency in West Java as a new industrial area followed the inauguration of Batang special economic zones in Central Java, said one official last week - Photo by West Java Government Office

JAKARTA (The InsiderStories) –  Indonesia prepares Subang Regency in West Java also known Rebana areas as a new industrial zones as part the government’ efforts to build the special economic zones around the country, said one official last week. The location near to Kertajati airport in Majalengka.

“The decision of Subang as a new industrial area was decided yesterday. We have been ordered to prepare it,” chairman of Investment Coordinating Board, Bahlil Lahadalia said in an official statement.

He expects, the development of industrial estates would be able to bring in foreign direct investment (FDI) into the country. As reported in the first half of 2020, the realization of FDI dropped by 6.9 percent compared to last year (YoY) and 0.4 percent on quarter-on-quarter (QoQ) basis to Rp96.69 trillion (US$6.67 billion) and domestic direct investment plunged 1.4 percent YoY and 16.4 percent QoQ became Rp94.31 trillion.

Lahadalia revealed, the companies has invested in Subang is a footwear-maker from South Korea, PT Taekwang Industrial Indonesia. This company has been established since Nov. 9, 2011 and has an investment of $160 million. 100 percent of products are exported. Earnings from current shoe sales reached $350 million per year.

The manufacturer has a factory area of ​​more than 44 hectares and around 27 hectares have been built. President director of Taekwang, Lee Young Suk stated, by 2025 the investment will increase by $100 million.

“At present our production is two million pairs of shoes per month, we will add to four million pairs of shoes per month. We plan to create a good workplace for employees which will amount to 40 thousand people,” he added.

On July 21, Taiwanese company, Meiloon Group relocated its electronic factory from Suzhou, China to Subang. The new project managed by PT Meiloon Technology Indonesia (MTI) and need costs $90 millon. The Group CEO and CFO of Meiloon, Eva Kuo said, the new factory will begin the production before the end of second semester of 2020.

Beside Subang, Indonesian government also prepares Batang Industrial Zones, Brebes Industrial Park to relocates Japan and US plant from China as an effort to boost the development of Central Java and spur national economic growth. The trade tension between the two largest economy, he acknowledge become an opportunity for the country.

The industrial zones part of National Priority Projects in 2020. As known, President Joko Widodo has approved 89 infrastructure projects to build in this year. Beside build in Java Island, the government plans to build 19 priority industrial zones outside Java from 2020 until 2024.

The government intends to grow zones outside Java since 2015 by developed 14 priority areas. Until 2019, the government has built 24 industrial zones in Sumatra, Kalimantan and other islands excluded Java. The government also planned to adds 19 industrial zones in nine areas.

Sei Mangkei and Kuala Tanjung in North Sumatra, Galang Batang and Bintan Aerospace Industry in Riau, Kemingking in Jambi, Tanjung Enim South Sumatra, Pesawaran and Way Pisang in Lampung, also Sadai in Bangka Belitung. Then, the ruler will establish six areas in Kalimantan, which are Ketapang in West Kalimantan, Surya Borneo in Central Kalimantan, Buluminung in East Kalimantan, Tanah Kuning in North Kalimantan, also Batulicin and Jorong in South Kalimantan.

The rest are Bangkalan in Madura, Weda Bay in North Maluku, Palu in Central Sulawesi, and Teluk Bintuni in West Papua Barat. The industrial areas focused on agro industry, oil and gas, metal and coal, also high technology industry and aerospace. The industry area planning has been through examination from various aspects.

While,  areas in Java will be focused on high technology, labor-intensive and industry with water low consumption and outside Java tend to be natural resources industry, logistic efficiency system industry, and center of new economic development. To date, there are 103 industrial zones that have operated with 55,000 hectares areas. The areas are located in Java of 58 areas, Sumatra of 33 areas, and the other areas.

Besides, there are 15 areas under construction and 10 areas in the planning stage. The activity in industrial zones has generated a multiplier effect on the national economy, ranging from the added value increasing, local human resources absorbing, and foreign exchange earnings.

US$1: Rp14,500

Written by Staff Editor, Email: theinsiderstories@gmail.com