Ministry of Industry Encourages Kendal to be an Example of Industrial Estate Development to Absorb Investment

June 10, 2021

Elsa Catriana - Kompas.com - 10/06/2021, 12:35 WIB

JAKARTA, KOMPAS.com - The Ministry of Industry continues to spur the competitiveness of the Kendal Industrial Park (KIK), Central Java, to be more integrated so that it can be attractive for the investors.

Minister of Industry, Agus Gumiwang Kartasasmita said this step need to be carried out through coordination and cooperation with relevant stakeholders, such as across ministries and institutions as well as local governments.

"KIK is one of the integrated clusters that can be an example for the development of other industrial estates in Indonesia," Agus said in a press release, quoted by Kompas.com, Thursday (10/6/2021).

Agus explained that KIK is a tangible manifestation of the cooperation between Indonesia and Singapore, which was built by PT Jababeka Tbk with Sembcorp Development Indonesia Pte. Ltd., a subsidiary of Sembawang Development Ltd. from Singapore.

The operation of KIK was officially inaugurated by President Joko Widodo and Prime Minister of Singapore Lee Hsien Loong in November 2016.

According to the Minister of Industry, the development of KIK will continue to be accelerated into an export-oriented labor-intensive industrial area.

It is believed that it can accelerate the efforts to recover the national economy due to the impact of the Covid-19 pandemic.

 "We appreciate that KIK currently has 66 Business Entities with an investment achievement of Rp 19.2 trillion. This investment certainly provides a broad multiplier effect for the economy, including foreign exchange earnings and labor absorption," said Agus.

Meanwhile, the Director General of Resilience, Territorial and International Industrial Access (KPAII) of the Ministry of Industry, Eko SA Cahyanto, said that his party had just made a working visit to KIK.

"We as the industrial estate builder support the continuation of KIK development so that more investors can enter," he explained.

The Ministry of Industry's proposal in order to accelerate the development of KIK to be more competitive are encouraging port development, facilitating competitive gas prices, and speed up the revision of Presidential Regulation Number 78 of 2017 concerning Spatial Planning for Kendal-Demak-Ungaran-Salatiga-Semarang-Purwodadi Urban Areas.

"Gas prices and the Perpres revision are the two priorities that we propose to increase investment in Kendal, especially in KIK," said Eko.

According to Eko, during a visit to PT Daeyoung, the company spent USD 13.8 per MMBTU for LPG or more expensive than the manpower cost.

“They use gas as an energy source in the dyeing process. Gas supply from East Java," he said.

Eko added that the company's production capacity has only reached 60 percent of its total capacity. “If the gas price is cheaper, it will certainly increase its capacity. Most of their products are for domestic use, and the rest is exported to Vietnam," he added.