Indonesia Targets 18 Industrial Zones worth US$17.73 B to Operate in 2019
Indonesian industrial zone Morowali Industrial Park (IMIP) in Central Sulawesi. Photo by PT IMIP.

JAKARTA (TheInsiderStories) – Indonesia targets to operate 18 industrial zones outside Java in the third quarter (3Q) of 2019. The projects have potential investment of US$17.7 billion, said an official government on Monday (04/07).

According to the Director at the Directorate General of Regional Resilience Access to the International Industry of Ministry Industry Ignatius Warsito, the investment includes the construction of supporting infrastructure, such as power plants, water treatment, wastewater treatment plants, land, and roads.

“The development of industrial zones outside Java is directed at the natural resource-based sector and mineral processing,” he said in a written statement.

Warsito explained, the 18 industrial zones were located in Lhoukseumawe, Ladong, Medan, Tanjung Buton, Landak, Maloy, Tanah Kuning, and Bitung. In addition, there are also in Kuala Tanjung, Kemingking, Tanjung Api-api, Gandus, Tanjung Jabung, Tanggamus, Batulicin, Jorong, Buli, and Bintuni Bay.

Previously, the minister Airlangga Hartarto, said that industrial zones that are in the construction phase, namely in Bitung, North Sulawesi. This Special Economic Zone is targeted to operate in 2019, and is focused on developing fisheries and coconut processing industries and their derivative products that are in demand by the domestic and export markets.

“We gave an example, in Morowali, which had succeeded in nickel ore into stainless steel. Nickel ore sells for around $40-60, while when it comes to stainless steel the price is over $2000. In addition, we have been able to export from Morowali for $4 billion, both hot rolled coil and cold rolled coil to the United States and China,” he explained.

Hartarto revealed that the government was getting more serious and focused on continuing to encourage the growth of the manufacturing industry outside Java, such as the eastern part of Indonesia.

“This is in accordance with the mandate of President Joko Widodo to realize Indonesian-centric development,” he said.

Hartarto detailed, in the eastern part of Indonesia, industrial zones that have been operating include the Morowali Industrial Zone which focuses on nickel processing-based industries and in Palu, Central Sulawesi, as an industrial cluster based on rattan and agro-processing.

In addition, there is the Bantaeng industrial area in South Sulawesi and the Konawe industrial area in Southeast Sulawesi.

“There are already 14 tenants in Palu industrial zone, 11 tenants in the Bantaeng industrial zone, 10 tenants of the Morowali zone, and around 6 tenants of the Konawe industrial zone,” he explained.

As far as November 2018, 10 industrial zones have been operating, including the National Strategic Project (NSP). The 10 industrial estates are located in Morowali, Bantaeng, Konawe, Palu, Sei Mangkei, Dumai, Ketapang, Gresik, Kendal, and Banten.

Based on Presidential Regulation No 58 of 2017 concerning the Acceleration of the Implementation of NSP, there are 23 industrial zones designated as national projects. So, the Widodo government is still in arrears of 5 industrial zones that have not been built until the end of his administration.

Referring to the Committee for the Acceleration of Priority Infrastructure Provision note, project preparation has been difficult due to a variety of issues, from technical to social aspects, including delays in preparing bidding documents.

The Committee projects that there are 31 national projects totaling Rp276.4 trillion which can be completed until the 3Q of 2109. The number will be an additional list of 62 NSPs that have been completed during the 2016-2018 periods, with a total investment of Rp320 trillion.

Written by Daniel Deha, Email: daniel@theinsiderstories.com