Choosing the ideal industrial area in Indonesia can be a daunting task. If you are assigned to look for the best industrial estate for your company, this article will help. Investing in a particular industry in Indonesia might be profitable, provided you find the right industrial area. However, you might want to know a few essential things before deciding on choosing your golden ticket. This article reveals all you need to know about investing in an industry in Indonesia. It is hard to survive amid fierce competition without the proper knowledge, especially in the industrial 4.0 era.
With the ever-advancing technologies, the competition is expanding to the digital zones. Marketing-wise and starting from the roots of manufacturing itself: production, distribution, and sustainability. Companies that make early adjustments reap the most benefits. Those left behind did try but failed to find the rights facts before settling in an industrial estate. This article will show you the facts about the industry in Indonesia, the industrial areas assigned by the government, and a selection of the most promising industrial estates suited to your requirements.
Indonesia’s Industrial Facts
Industry in Indonesia is the Biggest Contributor to National Economy
Industry in Indonesia is the most significant contributor to the Indonesian national economy, with a whopping share of more than 20%. In terms of economic proportions, Indonesia can be categorized as an industrial country and is included in the ranks of the world’s elite. The world now sees manufacturing as a vital sector of the economy. This consensus has been agreed upon at the World Economic Forum, which states that industry is a process that involves pre- and post-processes as a single unit. In simple terms, industrial processes are those that occur inside and outside the factory.
Indonesia’s Manufacturing Industry is Top 10 in the World
Based on this percentage, industry in Indonesia is also included in the top five countries in the world whose contribution is relatively high. The UK contributed about 10%, while Japan and Mexico were below Indonesia with a 19% contribution. Indonesia also ranked above the United States. In the value-added manufacturing category, the industry in Indonesia ranks in the top 10 in the world, equal to Brazil, and the UK, and is more extensive than Russia.
Indonesia’s Main Manufacturing Products
Throughout the first decade after the Asian Crisis, industry in Indonesia went through a period of recession in which foreign investors were reluctant to invest. After 2008, however, foreign companies and investors regained confidence in the industry in Indonesian manufacturing due to robust domestic demand brought on by the growing middle-class, low wages, and the promising mining sub-sector.
One indicator that shows investors’ appetite for Indonesia’s industrial sector is the significant rise in hectares of the industrial area taken up in the Greater Jakarta area since 2010.
Indonesia’s main manufacturing products consist of Footwear, Textile Products, Paper Products, Automobiles, Furniture, and Electronics. Major MNCs and local giants compete to gain market share in these profitable sectors of industry in Indonesia.
Industrial Growth Projection In 2021
The Indonesian Ministry of Industry projects that the non-oil and gas processing industries will grow by 3.95% in 2021. This estimate assumes that the COVID-19 pandemic is under control and that vaccines are gradually available in the community.
The sub-sectors of industry in Indonesia that support the improvement of national manufacturing performance during the current pandemic include the pharmaceutical, product, chemical and traditional medicine, the chemical industry and goods made of chemicals, the base metal, and the food industries.
Indonesia’s food and beverage industry also continued to grow positively during the COVID-19 pandemic because products from these industries are consumer goods consumed regularly by the community. The automotive industry in Indonesia is bouncing back strongly towards positive growth.
Investments in the manufacturing industry in Indonesia are projected to grow by 22% or reach IDR 323.56 trillion or USD 22.68 million. The Ministry of Industry said that investment in the manufacturing sector in January-September 2020 increased 37.1% compared to last year. The numbers prove that investment in the industrial sector is still solid despite the pandemic, contributing to 17.9% of GDP, the largest compared to other industries.
Indonesia is preparing to realize the vision of Indonesia Gold in 2045 through Industry 4.0. Currently, the development of Indonesia’s digital economy and industry 4.0 is the fastest in Southeast Asia. In 2025, Indonesia’s industry 4.0 is estimated to contribute to a GDP totaling USD133 billion significantly. With 185 million people connected to the internet (the fourth-largest globally), this industrial progress will lead Indonesia to become the top ten global economic powers in 2030.
Indonesia has prepared a roadmap for the industry in Indonesia with the implementation of “Making Indonesia 4.0”, launched in 2018.
Industrial Estate Development in Indonesia
Indonesia has opened many industrial areas in the last few decades. Ranging from 5 to 3.175 hectares, these are widely distributed all across the country. However, rapid developments also mean less stock of the available land area.
Indonesia remains the target of global investors to invest in expansion or relocation. This fact is reflected in Indonesia’s investment value realization of the manufacturing sector. It achieved IDR 272.9 trillion or USD 19.13 million in 2020, up 26% compared to 2019.
Increases In The Last Five Years
There has been an increase in the number and area of industrial estates in the last five years. In terms of numbers, the increase was 47.5%. Meanwhile, in terms of available land area, 15,662.02 hectares or 43.26% increased. Outside Java island, industrial estates jumped by 14, with an additional 8,664.36 hectares of land in 2020. One hundred twenty-seven (127) industrial areas covering a total area of 55,000 ha are ready to welcome relocation activities from global investors.
Though there are plenty of areas to choose from, very few are fully equipped to support industrial revolution 4.0, especially those in the less populated place, where the land is better suited for plantations like palm oil. As many economic developments revolve around Java, it is not surprising that the best location remains on the island, with ample infrastructures and distribution points as the significant factors.
The Most Promising Industrial Estates in Indonesia
Of the few locations that meet the industrial revolution 4.0 pre-requisites, Karawang and Subang in West Java stand out as the most promising. Strategic sites, seamless connectivity for logistics efficiency, close to vital infrastructures such as international airports and seaports, and major toll roads and railway networks.
Suryacipta – Fully Integrated Smart Industrial Estates in West Java
Suryacipta is one of the most extended established business groups in Indonesia. As a prominent industrial area provider, its businesses include real estate development, management, construction, and hospitality. Suryacipta focuses on developing and managing two of the most promising industrial estates in West Java, the Suryacipta City of Industry and Subang Smartpolitan.
Suryacipta Industrial Estates – Built for All Company Purposes
Suryacipta Industrial Estates in Karawang and Subang are built to suit all types of requirements. Whether it is opening a new market or expanding to a new area, the facilities are world-class. You can set up operations with principles and vendors present in the same conducive neighborhood.
The infrastructures and facilities are meticulously designed for various industries: automotive, automotive parts, consumer goods, building supplies, steel metal, pharmaceutical, electronics, logistics, IT and data centers, and medical equipment.
Available Plots to Invest in Suryacipta City of Industry & Subang Smartpolitan
Suryacipta City of Industry
Suryacipta City of Industry (SIC) in Karawang has recently opened new plots in the Phase 3 development, having a total available area of approximately 90 hectares. These industrial plots are available in large (>10 ha) or medium and small (>1 ha) sizes to accommodate various requirements for different industries.
The Manor Building offers rental space for all your office needs. The nearby Batiqa Hotel and Serviced Apartment standby to serve visiting executives and your esteemed clients/partners. There is also the Promenade, a commercial area with many restaurants, cafés, a convenience store, a clinic, and many national and foreign banks.
Subang Smartpolitan
This 2,700 ha industrial property recently had a groundbreaking ceremony in November 2020. Having direct access to toll networks connecting directly to major cities, West Java International Airport, and the new Patimban Seaport, Subang Smartpolitan is connected via a railroad network and the upcoming Jakarta-Surabaya High-Speed Train.
Subang Smartpolitan industrial area is set to host advanced manufacturing practices, enhance efficiency, effectiveness, security, and facilitate balanced living through the adoption of technology and IoT. There have been undisclosed concrete MOUs signed by international companies with many more to follow suit.
Host to Over 150 Companies from Asia & Europe
Major world corporations already reside in Suryacipta City of Industry in Karawang. The facilities for urban lifestyles such as commercial, educational, residential, and healthcare, supported by a robust transportation network, perfectly suit these global manufacturers’ requirements.
The 1.400 ha industrial estate currently hosts 150 companies from Europe and Asia, including Japan, Korea, China, Taiwan, Belgium, Switzerland, Indonesia, and other ASEAN countries. This fully serviced industrial estate is equipped with international standard infrastructures and utilities, integrated with ample facilities and amenities to achieve operational efficiency, higher productivity, and sustainable growth.
Here are some of the tenant companies in SIC:
- PT Astra Daihatsu Motor, Japan – automobile manufacturer within the Toyota Group specializing in the compact car business.
- PT Bridgestone Tire Indonesia, Japan – the world’s largest tire and rubber company.
- PT Isuzu Astra Motor Indonesia, Japan – commercial vehicle and diesel engine manufacturer.
- PT JVC Electronics Indonesia, Japan – premium audio and electronics manufacturer.
- PT GS Battery, Inc, Indonesia – the world’s second-largest battery company.
- PT Bekaert Indonesia, Belgium – world market and technology leader in steel wire transformation and coatings.
- PT Astra International Tbk, Indonesia – Southeast Asia’s largest independent automotive group.
- PT ZTT Cable Indonesia, China – leading manufacturer in providing turnkey solutions of fiber optic communication, FTTH, submarine cable system, overhead transmission system, RF cable system, and premise cabling.
- PT Zinus Global Indonesia, Korea – the leading easy to understand, assemble, and enjoy comfort mattress producer.
- PT Nestle Indonesia, Switzerland – the largest food and drink processing company in the world.
Strategically Located in Industrial Corridor
Located in the heart of the supply chain link SIC and Subang Smartpolitan have easy and fast access to many distribution avenues. Various integrated transportation modes, toll roads, railways, airports, and seaports are well connected for business purposes.
From SIC and Subang, the new Patimban Seaport is ±40 km, Kertajati International Airport ±70 km, Husein Sastranegara International Airport ±93 km, Bandung City ±90 km, and Central Java Province ±150 km. The capital city Jakarta City is ±90 km, Tanjung Priok Seaport ±100 km, Soekarno-Hatta International Airport, ±120 km. These industrial estates are strategically located in the industrial corridor of Java and Indonesia.
Comprehensive Assistance to Get your Business Settled with Ease
Suryacipta Centre of Information (SCI)
Save at least half a year when purchasing industrial estates with Suryacipta Centre of Information (SCI), the first free-of-charge one-stop service of its kind. SCI offers a comprehensive guide for investors in planning, starting, and operating investments in Indonesia. Maximize efficiency and effectively engage with competent professionals during the investment process.
SCI also partners with selected Government Entities, Consultants, and Vendors and provides investor facilities to interact with professional consulting partners. The A-to-Z service includes business start-up consultation, investment consultation, environmental and building permits, updates on government regulations, contractor recommendations, and many more. Information seminars and focus-group discussions are regularly held to help investors comply with current government regulations regarding environmental, and legal aspects, among others.
KLIK Program
Direct Construction Investment Service (KLIK) is a government-initiated program that enables investors to start factory construction on selected industrial plots for sale even before obtaining building permits. The structure could be started immediately after obtaining principle and investment permits while other permits are managed in parallel.
To acquire an industrial real estate for sale as quickly as 1-2-3, investors only need to:
- obtain Investment License at national or regional One-Stop-Integrated Service (PTSP),
- arrange for an industrial land survey before acquiring land within the selected industrial park, and
- immediately start the construction whilst applying for building and environmental permits.
Conclusion
This article helps you to understand more about industrial areas in Indonesia. There is plenty of opportunities waiting for expanding or relocating your business with Suryacipta Industrial Estate.
We encourage you not to miss this excellent prospect to run your establishment in Indonesia because of the limited availability of industrial land. Suryacipta City of Industry and Subang Smartpolitan invite you to join the industrial revolution 4.0 and make your mark in your industry. For a confidential consultation or inquiry, click here.