Monday, 2 November 2015


Industry Minister Saleh Husin expects industrial estate development today to not only be filled with factories, but also equipped with residential, business, education, entertainment and sports. Such area is called a third-generation industrial area, which is able to make a new modern and independent industrial city.

“Third-generation industrial zone is proven successful in spurring local economic growth and is able to respond to economic, social, culture and environmental challenges as well as capable of transforming itself into a new modern and independent industrial city,” said Minister of Industry in his speech at the “Sharing Session and Breaking Fast Together” event organized by PT Jababeka in Jakarta, on Monday (July 13).

Therefore, the government continues to encourage the development of new industrial zones into third-generation industrial areas so as to foster new industrial cities throughout Indonesia. “PT Jababeka Tbk is a pioneer who developed third-generation industrial area,” said the Minister of Industry.

As an illustration, first-generation industrial areas are industrial zones built and managed entirely by the government, where the government acts as developer, operator and regulator. This stage took place since the 1970-1980s. First-generation industrial areas are Pulogadung Industrial Estate – Jakarta, Rungkut Industrial Area – Surabaya, Medan Industrial Estate; and Makassar Industrial Area. “The government has a very dominant role in the operation of first-generation industrial area,” he said.

Meanwhile, second-generation industrial areas are industrial zones built with a simple concept, i.e. as a factory location alone. This area is growing when Indonesia’s economy was booming, which is in 1990-2000 and in the midst of the growing spirit of deregulation of the government. “These industrial zones are fully constructed by the private sector, and the government only acts as regulator,” he explained.

The progress of the industrial sector is believed to be supported by the provision of industrial locations equipped with a variety of industry supporting infrastructures, so as to make the industry competitive. “Therefore, the provision of industrial zones becomes one of the priorities in the national industrial development program in the future.”

The role of the industrial area in the development of the national industrial sector is very strategic and significant. Industrial area accounts for about 40% of the total value of non-oil & gas exports and attracts investment of 60% of the total investment of the industrial sector as well as providing a substantial contribution to state revenue in the form of various taxes. “Until now the number of industrial estates in Indonesia reached 74 industrial zones with a total land area of 30 thousand hectares. But, 67% of the location of the industrial area is concentrated in Java, “he said.

Therefore, the government has developed direction of national industrial policy that encourages the development of industrial zoning outside Java, either in the form of areas designated for industrial purpose, industrial areas, as well as small and medium-sized industrial centers. In addition, the government also continues to encourage growth of industry population as well as increased competitiveness and productivity, especially for industries outside Java.

“The government will work hard to continue to encourage the development of new industrial areas, especially outside Java, as part of even distribution of industry,” said the Minister of Industry. in 2035, it is expected that percentage of industry distribution outside Java will increase to 40% from 27.22% currently.

To encourage this, the government has set 14 priority industrial estates to be built outside Java, comprising of 7 industrial estates built in the Eastern part and the rest in the Western part. Construction of a new industrial area will be directed to grow into new modern and independent industrial cities.

On the occasion, the Minister of Industry gave appreciation to the President Commissioner of PT Jababeka Tbk, Setyono Djunandi Darmono, for his extensive knowledge and vision of the development of modern industrial park. “in addition, he is also a true entrepreneur soul who does not give up and is always optimistic so that he is able and keen to see that problem is a business opportunity,” he said.

According to the Minister of Industry, the development of third-generation industrial areas is very relevant to the opinion of SD Darmono as outlined in the book with the title “One City One Factory: Building 100 new Cities”. “The concept of One City One Factory is a quite realistic approach in building industrialization today.”

On the other hand, his party expects that the government and the business can continue to build synergy and collaboration in order to accelerate the creation of a new industrial are. Of the 14 priority industrial estate development outside Java, he said, the government must be able to ensure and facilitate the anchor industry to start its business in this area. According to him, to develop industrial estates in the regions, special incentives were needed to attract investors. (E)

Business News - July 22, 2015

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