Understanding Industrial Park in Indonesia
Before diving deeper into the idea of investing in Batam, first, we need to understand how the Indonesian government defines an industrial park or investment park. The Indonesian Government Regulation No. 24/2009 defines industrial parks are as the industrial areas where industrial activities occur. These are supported by complete facilities and infrastructure and managed by an Industrial Estate Company.
Industrial estates are developed and managed by leading and sometimes multinational developers. Statistics from the Indonesian Industrial Estates Association (HKI) show that there are 73 industrial estates in 20 areas spread throughout Indonesia.
HKI chairman Sanny Iskandar stated that there was rapid progress for many industries in these industrial areas, such as the food and beverage industry, automotive components, and consumer goods.
For an industrial estate company to set up an industrial park, they must first submit permits to be processed at the Ministry of Industry. Several licenses are available for different investment activities and areas. They are:
1. Investment Activity Permit in the Industrial Estate Sector
A permanent permit is required for industrial estate companies that have completed their preparation of ready-to-use industrial estates. This permit is permanent for local investors and valid for 30 years for investment activities from foreign investors. Approval of the license is submitted to the Ministry of Industry.
2. Investment Activity Permit in Industrial Estate
This requires a permit issued by the organizer of the industrial area to conduct business activities within the industrial area. This application and processing of the license are made at the Industrial Estate Management Office.
3. Bonded Zone
A building, place, or area with specific boundaries where business activities of imported goods and materials are carried out for export purposes.
4. Bonded Zone Operator Permit (PKB) as well as Entrepreneur in Bonded Zone (PDKB)
Local and foreign investors must own this permit in the processing/manufacturing industry field. Those who require permits are usually those with industrial and/or warehousing locations who wish to obtain facilities as a bonded zone and get bonded Zone Operator (PKB) status as well as an Entrepreneur in a Bonded Zone (PDKB). The application for PKB and PDKB permits is submitted to the Minister of Finance.
5. Entrepreneur Permit in Bonded Zone (PDKB)
Local and foreign investors must own this permit in the processing/manufacturing industry field. Those who require permits usually wish to obtain facilities as an entrepreneur in a bonded zone. The application for a PDKB permit is submitted to the Customs Service Office (KPBC).
More Industrial Park To Be Added to Batam
Industrial Park Zoning in Batam
The manufacturing sector, strategic services, information technology, and trade are potential sectors of the possible developments in the Free Trade Area and Free Port (KPBPB) of Batam Bintan Karimun (BBK).
Bintan is focused on tourism and industrial parks, including the maintenance, repair, and overhaul (MRO), alumina, food processing, maritime defense, and sports industries. Tanjungpinang is focused on the heritage tourism sector, the halal industry, the fishing industry, the business center, and the center of the integration zone.
Regarding the development of the industrial area on Bintan Island, it will be carried out in the Lobam Industrial Estate, which currently has a business area of 172 hectares with competitive and export-oriented products.
In addition, Bintan Island will see the development of the Bintan International Airport, which will begin in 2022. The airport development will become not only an MRO but also a Logistics Hub and Aerospace Park. Currently, the Government is reviewing the route distribution between Batam Airport, Tanjungpinang Airport, and the Planned New Bintan Airport.
The plan is to develop industrial estates in Batam, with each area having different themes, which will be very good with integrated waste management. The conclusion of the primary economic concept can be implemented in Batam to utilize the value of raw materials or the rest of the production process so that they can be processed and used for industrial raw materials downstream.
Biggest Industrial Parks in Batam
Batamindo Industrial Park
Designed as a ready-to-use development facility, companies setting up here will be able to save capital injection and enjoy a hassle-free start. This industrial park caters to various manufacturing operations such as readily built factories, separate office spaces, and production areas for loading and unloading, among others.
Batamindo also provides ready land areas for those offices wanting extra specific facilities. Completed with dormitories, housing options, and a country club, Batamindo’s 320-hectare investment park already holds some international brands since its inception in 1990.
Kabil Integrated Industrial Estate
The 540-hectare industrial park is located strategically along Batam’s coastal waterfront. Developed to cater to mainly oil & gas industries with large land plots, KIIE specializes in land plots near the coast for those companies that need a movement of heavy and oversized cargos.
With an International Cargo Port, energy companies can easily use it as an operating destination. This industrial park also benefits from being within the Free Trade Zone, which can strongly encourage foreign investment as they will be exempted from import duties, VAT, and excise for capital goods and raw materials.
Citra Buana Industrial Park I, II, III
As the pioneer of planned communities in Batam, this investment park comprises many blocks of workshops for clean and light industrial trades. Having established itself as a leading developer in high-quality residential and commercial properties throughout Indonesia, Citra Buana has provided services for several Singapore companies and F&B properties, all with affordable facilities and human resources.
Bintang Industrial Park I, II
Bintang Industrial Park covers 75 hectares of land and is opened directly by the Indonesian Ministry of Industry and Trade. This industrial park is located in the main area of the shipbuilding and fabrication industries. This industrial park offers ready-built factories for automotive, electronics, machinery, workshops, and others.
Kawasan Industri Wiraraja
The ultimate destination for foreign investors to set up their businesses. This state-owned industrial park does not need a location permit, is free from floods, and is fully equipped with clean water, 24-hour security, a fully functional support team, natural gas supply, and high-performing electricity networks.
This industrial park’s specially permitted KLIK feature allows investors to carry out construction after getting an immediately obtained permit directly. Businesses set up here will benefit from the KLIK feature since only 47 Industrial Estates in Indonesia have that advantage.
Panbil Industrial Estate
Under the prestigious Panbil Group, who’s been in business since 1989, Panbil Industrial Estate was born in 2001 in Batam with a fully integrated area consisting of commercial centers, recreational zones, apartments, and other facilities.
This investment park focuses on the ever-growing electronics industry in Batam, the lucrative automotive industry, telecommunications, and others. Going well over the industry standards, Panbil provides an endless supply of electricity, clean water, gas, and fiber optic lines, all for the well-being of the investors.
Sarana Industrial Point
This is located in the center of Batam, near most government buildings. With over 1000 new houses and factories around the area, this industrial park is near the ferry terminal. With several ready-to-use factories for sale and leases made available to local and foreign investors, Sarana Industrial Point also provides telecommunication cables supplied by Telkom, uninterrupted electricity by PLN, and reliable water supply with WHO standards.
Tunas Industrial Estate
The most significant industrial park in Batam Center, Tunas Industrial Estate, started in 2001 and covered over 64 hectares of land. We are seeing the growth of Batam has encouraged Tunas Industrial Estate not only to build 1 investment park but four. With vast choices of industrial buildings and warehouses suitable for industry needs, demand for these industrial parks is also increasingly seeing growth in the economy of Batam.
Offering a competitive pricing scheme for foreign investors looking to set up their business in Batam, this industrial park close to the seaport might be a good choice.
Cekindo is the leading market entry consulting firm in Indonesia that helps people from all over the world expand their business there. With the abundance of industrial parks in Batam, it is now more accessible for foreign investors to set up their businesses in the city. Check out how Cekindo assists company registrations and complying with the country’s laws to acquire a business license.