Monday, 15 July 2013


Various circles who knew about the development of the Sei Mangke Exclusive Economic Zone, the Regency of Simalungun, North Sumatra, would gladly welcome if in the end this big project was realized. As known, discourse over the plan of this project had been around since four years go, but the process had been extremely slow.
If in the end the Central Government inaugurated the Masterplan of Indonesia Economic Development Expansion [MP3EI] in North Sumatra, ground breaking of the KEK Sei Mangke project was something to be grateful about.
Groundbreaking ceremony was led by the Coordinating Minister of Economic Hatta Rajasa, flanked by the Ministry of Transportation M S Hidayat, andHead of BPN Herdaman Supanji. Present at the event was also the Governor of North Sumatra, Regent of Sumalungun, Regent of Batubara, Deputy Police Head, Bukit Military Commander, and the Provincial Muspida and Regency of Simalungun and Batubara.
According to Hatta, in this KEK of Sei Mangkei, development of world class industry would be well underway. Even with their geographic comparative advantage KEK Sei Mangke would be the world’s industrial Hub. Sei Mankei is a strategic component of the MP3EI program.
The KEK Sei Mangke was designed to accommodate more than 200 world class industry which was most meaningful for strengthening Indonesia’s competitiveness in the future. Today KEK Sei Mangkei was one of the KEK with access to the Malacca Straits which would be integrated to the Kuala Tanjung zone and directly inter-connected with the Kuala Tanjung zone and Kuala Tanjung Global hub. This would make Sei Mangkei develop into one of the economic and industrial hubs of the world.
The role of KEK Sei Mankei was expected to lessen dependency on imported raw materials in fulfilling various people’s need. For information, there were three infra structure projects as part of the groundbreaking process in KEK Sei Mankei.
The first project was dry port building with capacity of 30,312 to 70 thousand teus per year. For this project investment of Rp78 billion was underway. The second project was building of tank farm with the capacity of 2 X 5,000 tons for CPO and 3,000 tons for CPKO phase 1. Investment of Rp100 billion had been prepared for this project. The third project included fund of Rp35 billion for processing clean water at the capacity of 250 cube meter per hour.
The infra structure project was financed by PTPN lll as developer and manager of KEK Sei Mankei. This project was expected to be completed and operated by end of 2014. Investment progress in KEK Sei Mankei had been remarkable, many reputable investors had come to invest and operate in KEK Sei Mankei.
Over the period of 2013-2014 some of the investors had realized their investment worth Rp6.5 trillion. By projection in the next 20 years investment value in the KEK zone of Sei Mankei would increase to Rp46 trillion, consisting of Rp38 trillion for the industrial zone, Rp5.5 trillion for logistics zone, and Rp2.5 trillion for areal development and tourism zone.
To support the investment process the Government extended support by investing in the development of regional infra structure to the amount of Rp2.7 trillion. KEK Sei Mankei could propel growth in North Sumatra which was rich in natural resources potential. Lake Toba for example, which was the biggest lake in Asia had 110,000 thousand hectares of water surface. Lake Toba could be relied upon as sustainable water resources which supplied 3.5 billion cube feet of water each year.
At the altitude of 900 meter above sea level, Lake Toba is the highest lake in the world. This altitude had the advantage of power sources for clean and sustainable electric generator. Through the flow of Asahan River, there was potential to generate 1100 megawatt of electricity, but so far only 700 megawatt had been used.
Furthermore in North Sumatra’s eastern coastline was ix riverbank areas. One of them was Bah Bolon River which was the important resource area for continuity of KEK Sei Mankei, Kuala Tanjung and other social-economic activities in this area. In the future this water resource should be well conserved. Indonesia’s future competitiveness would be much determined by the nation’s capability to manage the water resources sustainably.
In terms of logistics, KEK Sungai Mangke would be inter connected with the Kuala Tanjung harbor and Kualanamu airport. The geo economic position of North Sumtra was most strategic against the Melaka Straits which was the world’s busiest trading waterway. Each year, not less than 120 thousand vessels sailed through the Melaka strait, which means that 300 ships passed this path in a day.
The ships carried various trading commodities to East Asia [China, Japan, Korea], to South Asia [India, Pakistan] to the middle east-Africa and Europe. In view of the access to world’s connectivity Indonesia must be smart, able, and as soon a possible benefit from it as part of national logistic connectivity whereby to minimize dependency of logistics services on the neighboring country.
It was estimated that each year Indonesia spent 5% to 6% of national export value to pay for foreign port services and feeder shipping. This was because Indonesia’s 25 main harbors had limitation in terms of depth, narrowness of waterway so they were only able to serve ships of small tonnage. Therefore the harbor of Kuala Tanjung, in the regency of Batubara played an important role as international harbors.
The pressing need was to function the Kuala Tanjung as international harbor soonest, because only thereby the harbor would be in a position to serve as national asset for the national logistics system as well as for the acceleration and expansion of national development that the kualanamu airport would soon also start to operate.
To transport flow of goods at KEK Sei Mankei, besides preparing overland route, the government must also prepare railway based transportation to Kuala Tanjung and Kualanamu airport. For this railway investment of Rp5 trillion had been prepared. All were expected to be accomplished by 2014 and could operate by 2015. However, the deadline could be delayed if land clearing problem was never solved. As known there was still land of five kilometers long the Bandar Tinggi-Kuala Tanjung junction which was still unsolved.
As a developed economic zone, KEK Sei Mankei had some infra structure to support industrial activities in the complex. The infra-structure, which was ready for inauguration encompassed medium tension electricity network of 20 Kv through 2,700 m, ROW Road 43 and 28 1,740 m long, drainage system 1,920 m and clean water processing at the capacity of 250 m3/hour with pipe of 1,350 m long, [phase 1] and 2,024 m long [phase 2]. The infra structure, which was financed by PTPN lll had used fund amounting to Rp5.8 billion for electricity network, Rp35.9 billion for road construction, Rp11.4 billion for main drainage and Rp8.8 billion for clean water processing facilities.
In this area, PT Unilever Oleo Chemical Indonesia had built a factory an a 27 hectare site. As one of the pioneering companies at KEK Sei Mankei, the role of Unilever was in line with the ambition of KEK Sei Mankei in developing upstream CPO industry. An investment of Rp2.04 trillion was prepared to increase CFPO added value into various by products like fatty acid, surfactant, soap noodle and glycerin. It was expected that this factory could employ 550 to 600 workers and create multiplier effects like enlivening micro-small-and medium business [UMKM].
Investment process had begun since quarter ll 2011 and was expected to start production in quarter ll 2014. In KEM Sei Mankei there was also NPK compound fertilizer factory with the capacity of 100 thousand tons per year and invested on a 20 hectare land by PT Cipta Buana Utama Mandiri.
In that factory a capital of Rp537 billion had been invested and the factory was expected to meet the need of NPK compound fertilizers for the agriculture and plantation sectors in the province of North Sumatra and Surroundings. This factory was projected to employ 250 workers and was expected to operate in quarter l 2015.
In tandem with the said developments, it was important to build human resources competence as well as science and technology whereby the economic hubs built in North Sumatra could bring property to the Indonesian people, particularly to welcome the Asean Economic Community 2015.
Therefore, it was right indeed for the Ministry of Industry to build an innovation Center worth Rp31.8 billion which would facilitate activities in testing, research, development of CPO products. The Palm Innovation Center was also training center for producing CPO by products for the Small-and Medium Industry [IKM].

If the KEK Sri Mangke were successfully run and proved to be productive, the concept of development in this area could be multiple on cloning basis in other potential development zones in Indonesia. (SS)                                       

 Business News - July 10,2013        

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