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Industrial Area Development Encouraging Investment Outside Java

by Sebastianus Epifany Tuesday, July 11, 2017 - 11:25

JAKARTA - Indonesian government believes the development of industrial zones can trigger the realisation of investment to the manufacturing sector outside of Java. This was disclosed by the Director General of Industrial Zoning Development Imam Haryono.

Imam Haryono asserted that investors in the strategic industrial project area have eased to manage the land acquisition. "The land management in the industrial area of PSN is guaranteed by the government to be able to operate quickly so that investment can flow more into the industrial area," said Imam as reported from Bisnis.com (11/7/2017).

The national strategic project lists 17 industrial estates in the revised list of strategic national projects. Five of them are new areas that are estimated to be able to absorb investment worth 79,13 trillion and it's located in Gresik, Dumai, Tanjung Buton, Wilmar Serang, and Tanah Kuning.

"With the entry of several new industrial areas into the PSN, all of these licensing barriers can be resolved quickly," said Imam.

Dumai Industrial Estate is a downstream centre of palm oil. JIIPE Industrial Estate Gresik is the centre of the heavy equipment industry. Wilmar Serang is a chemical and steel processing industry. "Tanjung Buton is more inclined to downstream agriculture and fisheries. While Tanah Kuning will be projected to be the centre of the aluminium processing industry," said Imam.

Fahmi Sahab, Executive Director of Industrial Estate Association is optimistic that more investment is flowing into the manufacturing sector with the increase of industrial estates within national strategic projects. According to him, capital owners not only see the incentives of fiscal stimulus such as tax holiday and tax allowance which offered by the government but firstly also see the availability of infrastructure as the main consideration.

"Infrastructure integration is a major consideration. That's why investors are not so much interested in the industrial development outside Java," said Fahmi Shahab.

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