This was conveyed by the Director General of Regional Resilience and International Industrial Access (KPAII) of the Ministry of Industry, Doddy Rahadi, before dozens of prospective South Korean investors who attended the "Industrial Park in Indonesia" seminar on Wednesday afternoon.
"The Central Government through the Ministry of Industry and other ministries/agencies specifically oversees the acceleration of the development of these industrial areas," Doddy said at the Ministry of Industry, Jakarta, Wednesday.
Doddy explained that South Korea ranked seventh in the realization of foreign investment in Indonesia in 2019 with a total investment of US$1.070 million.
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This investment is spread out among the five largest industrial sub-sectors, namely the chemical industry and chemical goods by 19 percent; leather industry, leather goods and footwear by 12 percent; the rubber industry, rubber and plastic goods by nine percent; the furniture industry by eight percent and also the pharmaceutical industry, chemical drug products and traditional medicines by five percent.
"However, the realization of this investment has declined compared to 2017 and 2018," Doddy said.
In order to accommodate the realization of the industrial investment plans going forward, it is necessary to build an industrial estate, in accordance with the mandate of Law No. 3 of 2014 concerning the industry, wherein the industry must be located within the industrial estate.
Currently, there are 112 operational industrial areas with an area of 52,438 hectares. In addition, there are 38 industrial estates that are in the process of construction and 10 industrial estates that are in the planning process.
Of the 112 operational industrial areas, 64 of them are located in Java, the rest are located in Sumatra, with as many as 37 industrial areas, Kalimantan has eight industrial areas, and Sulawesi has three.
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Since 2015, there has been an increase of 15 industrial estates.
In an effort to encourage the development of industrial estates, Doddy assessed that there are still challenges that must be overcome together.
These challenges include the process of preparing documents, land, and spatial planning, licensing, the need for infrastructure, management and search for tenants and the ease of business in the future.
"The Ministry of Industry also facilitates the infrastructure needs outside and within the industrial area. The Ministry of Industry is coordinating the provision of infrastructure outside the industrial area with the relevant ministries," Doddy said. Related news: Indonesia asks S Korean businesses to increase investment