Indonesia Lures 7 Foreign Locators to Batang Industrial Estate, 17 More in Talks With Government

JAKARTA, KOMPAS.com – Seven investors from the US, Japan, Taiwan, and South Korea have decided to relocate their plants to Indonesia's Batang Integrated Industrial Estate in Central Java, with 17 more potential locators - all foreign investors - in talks with the government, said the Investment Coordinating Board (BKPM).

The industrial zone in Batang offers several advantages, including relatively low labor costs, access to the toll road, proximity to the port, and location next to railroad tracks, said BKPM head Bahlil Lahadalia.  

It’s an alternative offered by the government after the Brebes Industrial Estate, located about 80 kilometers west of the Batang Regency.

It also offers very competitive land prices to locators, said Bahlil.

"The price of a plot of land in the Batang industrial estate costs only 1 million rupiahs ($70) per meter." 

The seven companies that have decided on locating in Batang starting this month, partly due to the infrastructure in Central Java, are: PT Meiloon Technology Indonesia, PT Denso Indonesia, PT Sagami Indonesia, PT CDS Asia (Alpan), and PT Kenda Rubber Indonesia, PT Panasonic Manufacturing Indonesia, and PT LG Electronics Indonesia.

The investments total $850 million or around 11.9 trillion rupiahs, potentially creating 30,000 new jobs.

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Business news site Kontan reported that BKPM has done intensive negotiations to bring in the foreign investment into the country.

Bahlil said his office established a special task force to assist the relocation process. It oversees the company's licensing which is done at the relevant ministries, institutions, and the regional government.

"The process was very intensive. We went straight to knock on the company’s door one by one and assured them that Indonesia was the right place for their factory," Bahlil said.

"The challenges were extraordinary. But that's where BKPM had to be creative and responsive. We took the necessary approaches. And thank God there have been results at this early stage." 

Seventeen other investors have expressed interest in relocating or diversifying their industries to Indonesia. One of them is a South Korean investor, LG Chemicals, that plans to build an integrated industry for vehicle battery and a smelter. This LG Chemicals investment is estimated at $9.8 billion and is expected to provide job opportunities up to 14,000 workers.

"BKPM through its special task force for investment relocation is committed to assist the relocation process and continues to carry out negotiations with various companies to attract more investors who want to relocate their business to Indonesia," Bahlil said.

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