Home News Indonesia to Build 19 Priority Industrial Zones Outside Java

Indonesia to Build 19 Priority Industrial Zones Outside Java

Indonesia’ economy is expected only grow by 2.5 percent in 2020 amid the COVID-19 pandemic, down from 5.0 percent in 2019, said Asian Development Bank - Photo by Industry Ministry Office

JAKARTA (TheInsiderStories) – The Indonesian government plans to build 19 priority industry areas outside Java from 2020 until 2024, the industry ministry announced on Tuesday (12/10). It is in line with President Joko Widodo’s vision to develop industry throughout the archipelago.

Minister of Industry Agus Gumiwang Kartasasmita said the government intends to grow industry outside Java since 2015 by developed 14 priority industry areas. Until 2019, the government has built 24 industry areas in the Sumatra, Kalimantan and other islands excluded Java.

With this success, the government will add 19 industry areas with nine areas in Sumatra which are 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.

Kartasasmita said the industry areas development is 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.

“The requirement for being priority industry areas included the management, the capability of financing, tenant, strategic value, local development capability, and government intervention forward,” he said.

However, there will be obstacles while establishing industry areas, but it should be accomplished altogether. The challenges are preparing documents and field, license, management, tenant hunting, and others.

Kartasasmita explained the areas in Java will be focused on high technology, labor-intensive and industry with water low consumption. While, areas outside Java tend to be natural resources industry, logistic efficiency system industry, and center of new economic development.

“The development of new economic centers will be integrated with areas development, included infrastructure building,” he said.

Meanwhile, to date, there are 103 areas that have operated with 55,000 ha total areas. The areas are located in Java of 58 areas, Sumatra of 33 areas and other areas. Besides, there are 15 industry areas under construction and 10 areas in the planning stage.

The activity in industrial areas has generated a multiplier effect on the national economy, ranging from the added value increasing, local human resources absorbing, and foreign exchange earnings.

The ministry noted, the investment in the industry sector reached Rp1,173 trillion from 2015 until the first half of 2019. The metal, machine and electronic was the major contribution of Rp266 trillion, followed by the food industry of Rp257 trillion. Then, chemical and pharmaceutical booked investment of Rp217 trillion, non-metal of Rp98 trillion and vehicle and automotive of Rp96 trillion.

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