Reaching IDR 141 Trillion in Investment, Kendal Special Economic Zone Proves Multiplier Effect on Regional Economic Growth

November 04, 2024

Monday, November 4, 2024, in the third quarter of this year, the Kendal Special Economic Zone has succeeded in exceeding the annual target given by the government. In terms of annual investment achievement, Kendal Special Economic Zone has succeeded in meeting the investment target of up to 227% by attracting investment of IDR 40.2 trillion, while the target given by the government was IDR 17.7 trillion. This investment comes from the addition of 18 new business entities throughout 2024.

 

Similar things can also be seen from the realization of the workforce absorbed. The target given was 15,100 workers absorbed, but the current realization is 17,353 workers or 115% of the target given has already absorbed throughout this year. With these realization number, of course, it has a positive impact on the accumulation of achievements of Kendal SEZ during the five years of operating as a Special Economic Zone.

 

With its designation as a Special Economic Zone in December 2019, this industrial park has shown excellent performance. Juliani Kusumaningrum as Head of Sales & Marketing revealed various developments that have occurred in the park after becoming a Special Economic Zone. "Significant developments are very visible after we became a Special Economic Zone. The growth is very rapid, both in terms of the number of business entities, workforce absorption, total investment absorbed, and export value, increasing by more than 100% from before becoming a Special Economic Zone. The multiplier effect of granting this Special Economic Zone status is very real."

 

Until now, it has been recorded that there are 116 business entities from various countries. This number has increased by 139% from before it became a Special Economic Zone. The total investment absorbed is also quite fantastic, reaching IDR 141.7 trillion, where in 2018 the investment value was recorded at only IDR 4.9 trillion. This increase also has an impact on the number of workers absorbed in the Kendal Industrial Park. Before becoming a Special Economic Zone, the workforce absorbed was only around 2,000 people, but from the current number of business entities, it has been recorded that 61,702 workers have been absorbed. It is noted that recently one of the Achor Companies from China has joined, which is also the No. 1 Company in sports apparel. This company will be the largest in the park and absorb more than 5,000 workers.

 

This industrial estate itself has been established since 2016 as one of National Strategic Project as well as a joint venture project between two leading industrial developers in Southeast Asia, namely PT Jababeka Tbk from Indonesia and Sembcorp Ltd from Singapore. The existence of KIP from the beginning was intended to support economic growth, especially in Kendal Regency and Central Java Province.

 

Several positive impacts occurred from the growth of the Kendal Industrial Park. For example, the investment in Kendal Regency grew by around 340% which had an impact on the growth of labor absorption. The existence of the Kendal Special Economic Zone also contributed to the growth of industrial land and infrastructure in Central Java. The growth also occurred in the increasing number of housings, banking, and F&B centres around Kendal and Central Java.

 

One of the things that drives the growth of the Kendal Industrial Park is the fiscal facilities by the Special Economic Zone. Investors or business entities in Kendal SEZ can enjoy Corporate Income Tax reduction in the form of Tax Holidays and Tax Allowances, free VAT, free of import duties and import taxes. Non-fiscal facilities such as ease of licensing are also become the factors for foreign and local companies choose Kendal SEZ.

 

Juliani also explained that there is another thing that is no less important, which is the support from various parties. "Of course, we cannot achieve this achievement alone, it takes a lot of support from various parties. In this case, we are very grateful to the government, both the local government and the central government who have continued to support the development of the Kendal Industrial Park for the past eight years."