Why Invest in Semarang?
It has been a while since Jakarta is not the only city that attracts businessmen in Indonesia. More than half of the population, which accounts for at least 130 million inhabitants, lives in the urban areas all around the country.
It gave birth to the new trading hubs such as Surabaya, Bandung, Medan and other fast-growing agglomerations are about to come. A new star in the Indonesian business sky that you should take note of is Semarang.
Semarang, situated on the north coast of Central Java, has a strategic position. It enjoys the proximity of many big cities completed with decent infrastructure within the region and the rest of the island.
Besides the roads, Semarang is also connected with all major Javanese cities by railway. In addition, the international airport and seaport that serve both domestic and overseas destinations facilitate access to remote markets.
Affordable Labour Force
The workforce is plentiful due to the significant migration from other parts of Indonesia and hiring qualified employees is also getting easier thanks to continuous improvement in the education system in Indonesia.
There are 20 universities just within the city, and other thousands of future professionals graduate from well-renowned institutions in nearby Special Region of Yogyakarta every year.
Yet the wages are on average lower than in Jakarta which helps to reduce expenses, especially in labour-intensive industries.
Moreover, the price of the land is also favourable, so it comes as no surprise that a number of companies from the traditional industrial area of Jabodetabek (Jakarta, Bogor, Depok, Tangerang and Bekasi) has already moved to Semarang.
New Kendal Industrial Park was opened by Indonesian president Joko Widodo in November 2016 as a part of the governmental effort for the further development of the region. Semarang expects investments of at least IDR4.3 trillion by 2021.
Singaporean investors, in particular, expressed prominent interest in new opportunities and government seems to be responsive to their business plans.
Big players such as Coca-Cola or Kubota (machinery manufacturer) have already built their factories in the city or within the adjacent towns. These factors clearly indicate that Semarang is nowadays the right place for launching a profitable company.
Key Business Fields in Semarang
Previous paragraphs proved that Semarang should be on the list of anyone considering entering the Indonesian market. Especially entrepreneurs who deal with food and beverages, production of textile and manufacturing should pay extra attention – these opportunities are worth investing in Semarang region.
Food and Beverages
The food and beverages is one of the fastest growing industries. According to the latest numbers from Ministry of Agriculture it grew 9.45 percent in the third quarter of 2017, and further development is expected for this year due to high investments and governmental support.
Moreover, Indonesia as the most populous Muslim country in the world can become the leading producer of halal food. Taking into consideration that some 87 percent of Indonesians are followers of Islam, the sector of halal food processing industry will flourish accordingly.
Producers are highly recommended to obtain halal certification to add credibility and competitiveness to their products in Indonesia.
Clothing manufacturing in Semarang is also on the rise. About 60 medium-sized and large textile enterprises relocated from Jakarta to the Central Java region in 2017. They are mainly attracted by the affordable workforce and the readiness of the local authorities for the industrial development of the area.
The major export destinations for textile from Semarang are the ever-growing markets of China, Japan and USA. The demand from Turkey and Egypt contributes significantly to the overall sales.
According to the chairman of the Association of Textile Manufacturers, Agung Wahono, the next step is to explore opportunities in other Middle Eastern countries.
Besides the industries mentioned above, there is a wide range of other fields in which manufacturers will find appropriate facilities for their businesses. For instance, 11 percent of the Kendal Industrial Park tenants are furniture producers, 13 percent are engaged in logistics and 24 percent produce building materials.
Cekindo with its office in Semarang is ready to help you to expand your business and join the successful entrepreneurs in the Central Java region. Fill the form below and we will assist you when investing in Semarang.
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