For the next 5 years the
need for industrial land was estimated at 5,000 hectares followed by areal
expansion outside Java. Presumably each year the need was between 500 – 1,000
hectares of land. The realization would soon exceed the estimate or probably
even below that. Land expansion was not only governed by investment growth.
Government projects, especially those outside Java, was also contributing
factor.
Sanny Iskandar, Chairman of the Indonesia Industrial
Estate [HKI] stated in Jakarta on Tuesday [7/10] that demand for industrial
land was growing with increasing zest of investors to build factories in
Indonesia. However investors were still concentrated in Bekasi and Karawang due
to lack of infra-structure in other areas. According to HKI data the need here
was around 600 hectares or 60% of total annual need the rest was spread out in
other industrial zones from Sumatra Sulawesi.
HKI data had it that total land area of industrial estate
in all of Indonesia came to 27,320.66 Ha up to June 2012. By the rule,
developers of the industrial area must build maximum 70% of total land area.
30% of land area must be used for infra structures open spaces and other
facilities.
Meaning developers must build industrial zones maximum
19,124.4 Ha. The land occupied by mid year came to 11,212.48 ha or 58.6% of
total land permitted for building. Hence Indonesia was rated as commanding over
industrial land covering 7,911.48 ha ready to be marketed to companies.
Sanny predicted that increasing investment caused the
need for industrial space 2019 to reach 5,000 Ha followed by land expansion
outside Java. He disclosed that although ready-to-use land was wide enough in
some regions, some investors were still hesitant to use them due to handicap in
infra structure. He rated that infra structure was still the main problem in
expansion of industrial areas in some regions especially outside Java.
Meanwhile BKPM noted that investment trend from 2010 to
June 2014 showed that Java was the most fertile. The area outside Java was
stormed by foreign or local investors in East Kalimantan, South Kalimantan, and
Papua. In 2013, domestic investment in East Java was 27.2%, East Kalimantan
[12.4%], Central Java [9.8%], West Java [7%], and South Kalimantan 6,5%.
In Semester I this year the portion of Domestic
Investment in East Java was equal to 25% national, the rest being West Java
[14.5%], Jakarta [11.4%], Central Java [10.6%]. East Kalimantan [8.6%]. In case
of foreign investment [PMA] last year West Java had 24.9%, and Papua 8.2%. in
Semester I/2014 investment flew in to West Java [22.6%], Jakarta [14.7%], East
Kalimantan [10.5%], Banten [7,5%] and East Java [6.8%].
Sanny stated that increased demand for industrial land in
the past 3 years was in line with industrial expansion of that period. The
trend of increased demand for land would only happen again in the next 3 years.
The economic climate in Indonesia today contribute to lessening demand for
industrial land in semester II.
Sanny remarked further that the Presidential election
process caused investors to take wait and see stance toward formation of
cabinet as related to the Government new policy on industry” Sanny said. (SS)
Business New - October 10, 2014
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