Industrial Park Development in Indonesia INDUSTRIAL PARKS TO

Industrial Park Development in Indonesia INDUSTRIAL PARKS TO BOOST COMPETITIVENESS, INDUSTRIAL DEVELOPMENT, SUSTAINABILITY AND INCLUSION Lima 11 th June 2019

Background of Industrial Park in Indonesia Industrial Park is a place for industry activities which is equipped with industry supporting infrastructures, developed and operated by industrial park developer. Industrial Park Development Objectives: a. Accelerating distribution of industrial development b. Increasing development of environmentally friendly industry c. Increasing investment competitiveness d. Giving suitable location for investment regarding spatial planning consideration Industrial Park (IP) History in Indonesia 1970 1’st Generation 1990 Stated Owned IP Domination Source: Ministry of Industry of Indonesia, 2019 2’nd Generation Private IP Development 2009 3’rd Generation Modern IP Today Next Gen Industry 4. 0 2

Investment in Indonesia Industrial Park Investment Schemes Private SOE* Cooperation IP Developer Financing Developer Operator Tenantship * National or Local Government Owned Prerequisites for developing Industrial Park in Indonesia: 1. Coherent with Regional Spatial Planning 2. Industrial Park Competition especially in related regional area 3. Developer background (financial and experience in developing industrial park) Source: Ministry of Industry of Indonesia, 2019

3’rd Generation Industrial Park Raw Material (Natural Resources) Infrastructures Education (Formal & Vocational) Incentives Industrial Park Research & Development Center New Urban Area Development Oriented Logistic System 4

Industry 4. 0 - Industrial Park Automation Internet of Things Industrial Services Focus on 5 industrial sectors: Industrial Park 3’rd Generation § § § § Infrastructure Logistic system Education R&D Raw Material New Urban Devt. Incentives Upgrading CHEMICALS AUTOMOBILETEXTILES ELECTRONI CS & GARMENT Source: Ministry of Industry of Indonesia, 2019 5

Indonesia Industrial Park (IP) Statistics 10 11 IP Distribution based on Island 92 2 Sumatera 6 5 Kalimantan Operated 5 Sulawesi ± 61. 000 Ha 5 Java 6 Source: Ministry of Industry of Indonesia, 2019 20 IP’s have been operated since 2014 - 2019 1. 2. 3. 4. 5. 6. 7. Sei Mangkei IP Morowali IP (IMIP) Konawe IP (VDNI) Kariangau IP Ketapang Ecology IP Palu IP Suryacipta IP 8. 9. 10. 11. 12. 13. 14. Sadai IP CIFD IP Subang Suryacipta IP Kendal IP JIIPE IP Tanjung Buton IP Bantaeng IP 15. 16. 17. 18. 19. 20. Surya Borneo IP Pancapuri IP Safe & Lock IP Piyungan IP KIM IP Expansion KIEC Expasion 6

Industrial Park Development Policies Java Outside Java 1 2 3 Natural Resources industry based IP (renewables and non renewable resources) Increasing logistic system efficiency 1 Advanced technology industry based IP 2 Labour intensive industry based IP 3 Low consumption water industry based IP IP as main contributor for new economic centers 56 (60 %) operated IPs are located in Java. In order to support inclusive development throughout Indonesia, Indonesia Government has plan to develop more IP outside Java Industrial Park Economy Impact Infrastructure Development Source: Ministry of Industry of Indonesia, 2019 Regional Development Indonesia Government has plan for 24 National Strategic Projects IP/Industry Based SEZ and 21 of them are located outside Java 7

National Strategic Project Industrial Parks and Special Economic Zones 1 2 Planning Construction 3 Operational 4 5 8 6 12 18 9 10 7 23 20 4 SEZ 3 SEZ/IP 22 19 13 11 24 21 17 14 15 16 17 IP Source: Ministry of Industry of Indonesia, 2019 1. 2. 3. 4. 5. 6. Lhoksumawe SEZ Sei Mangkei SEZ/IP Kuala Tanjung IP Tanjung Buton IP Dumai IP Tanjung Api-Api SEZ 7. 8. 9. 10. 11. 12. 13. Tanggamus IP Ketapang IP Mandor IP Jorong IP Batulicin IP MBTK Maloy SEZ Tanah Kuning Kaltara IP Miscellaneous Industry 14. 15. 16. 17. 18. 19. 20. Serang Wilmar IP Kendal IP JIIPE Bantaeng IP Palu SEZ/IP Bitung SEZ/IP Morowali IP 21. 22. 23. 24. Konawe IP Buli IP Sorong SEZ Bintuni IP Agro industry Oil & Gas Industry Metal based industry Fisheries industry 8 Shipping industry

Regional Connectivity IP SEI MANGKE IP BITUNG SEZ MOROTAI SEZ MBTK IP MANDOR SEZ SORONG NSTR DANAU TOBA IP KETAPANG IP MOROWALI SEZ TJ. KELAYANG IP BINTUNI IP BATU LICIN IP TANGGAMUS IP BANTAENG NSTR LABUAN BAJO NSTR BOROBUDUR NSTR MANDALIKA NSTR BALI NSTR: National Strategic Tourism Region Infrastructures are needed to support Indonesia’s Industrial Park and Special Economic Zones… INTERNATIONAL HUB PORT SEZ: Special Economic Zone HUB PORT MARINE HIGHWAY HUB ROUTE IP: Industrial Park FEEDER PORT MARINE HIGHWAY FEEDER ROUTE RAILWAY DEVELOPMENT TOLL ROAD DEVELOPMENT 9

Conclusions IP Policies in Indonesia are already considered social equity, economic growth and environmental protection. IP 3’rd Generation is coherent with sustainable development concept which is considered not just about economic growth but also environmental protection and supporting for social aspects such as education and new urban area development which is equipped by social facilities. Indonesia is already considered industry 4. 0 implementation in IP which is focus on 5 industrial sectors. National Strategic Projects for IP and SEZ outside Java is a policy to support social equity and economy growth throughout Indonesia.

Thank You Contact: Ignatius Warsito Director of Industrial Region kipit@kemenperin. go. id ignwarsi 64@yahoo. com Yuwono Ario Nugroho Head of Section yuwono@kemenperin. go. id Iqbal Dermawan Siregar Head of Section iqbal-d@kemenperin. go. id