~For industrial estate --- August 29

~For industrial estate --- August 29

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ANPAd..r..
Industrial-estate-business

Industrial estate business begins to look up

Signs of a revival in investor confidence has brought fresh
hope to the country's many industrial estates, which have been in
the doldrums since the crisis hit the country several years ago.

Activities in many of the industrial estates, especially those
located near Jakarta, have picked up. Many of them are improving
their infrastructure in a bid to take advantage of the increase
in business confidence.

Although the flow of FDI remains low, there has been a sharp
increase over the last several months.

According to the latest data from the Investment Coordinating
Board (BKPM), foreign investment approvals rose 80 percent to
$6.63 billion (949 projects) from January to July of this year,
from $3.71 billion (713 projects) in the same period last year,
while domestic investment approvals surged to Rp 31.51 trillion
(136 projects) from Rp 28.71 trillion (120 projects) previously.

The value of realized foreign investment from January to July
soared by 95 percent to US$4.9 billion, compared to $2.49 billion
in the same period last year.

Industrial estate developers are upbeat that the revival of
business confidence will encourage the setting up of more
companies.

At least 40 industrial estates are currently operating in the
country, of which 32 are located in Java. Of the remainder, three
are on Batam Island, one is on Bintan island, three are in
Sumatra and one is in Makassar, South Sulawesi.

PT Jababeka Industrial Estate, which operates a 3,000-hectare
industrial estate in Cikarang, Bekasi, for instance, is currently
developing the Jababeka Central Business District (JCBD) on a 16-
hectare plot of land following the completion of other
facilities, such as a residential estate, malls, shopping centers
and education parks.

The JCBD is complemented by stores offering a wide range of
necessities from fashion and beauty products to cellular phones
and banking facilities.

Apart from the Jababeka Central Business District, the estate
is also constructing the Capitol Business Park, including an
executive club, an international hospital and a police
headquarters.

The existing tenants will be able to take advantage of the new
facilities and, hopefully, they will also help attract
prospective investors to set up their companies in Jababeka, said
PT Jababeka's marketing general manager, Agus Canny.

The estate recently started marketing new industrial plots of
between 5,000 square meters and 50,000 square meters each,
complete with standard electricity supply, telephone connections,
water supply, and wastewater treatment facility.

In addition to the industrial plots, the estate also offers
factory buildings of different types and sizes for light and
medium-scale companies.

PT Jababeka, established in 1989, has succeeded in persuading
leading national and multinational corporations to set up
factories in the estate. Investors include those from the United
States, Japan, Korea, China, Malaysia, Singapore, Norway and
Sweden.

Most of the companies are involved in the automotive, spare
parts and consumer goods activities.

While efforts to attract investors continue, the Jababeka
estate has also boosted its services to existing tenants to make
them feel at home as, generally, prospective investors seek input
from those already doing business in the estate before setting up
operations there, Canny said.

Tenants, for example, are always facilitated if they need such
things as additional electricity connections, telephone lines or
water supply.

Other industrial parks that are well-known among investors
and industrialists include Lippo Cikarang in Bekasi, Surya Cipta
Swadaya in Karawang, West Java, the Cilandak Industrial Estate in
South Jakarta, Pluit Distribution Center in North Jakarta,
Kawasan Berkat Nusantara, Balaraja Industrial Park, Taman Tekno
Bumi Serpong Damai in Banten and the Krakatau Industrial Estate
Cilegon (KIEC) in Banten.

Lippo Cikarang, a self-contained satellite city located about
40 kilometers east of Jakarta, is also improving its residential
and industrial facilities.

Lippo Cikarang has been developed in such a way as to allow
residents to work there, go to school there, do their shopping
there and enjoy recreational facilities available both indoors
and outdoors, including the sports center at the Hotel Sahid
Lippo Cikarang and "Water Boom", a water sports theme park.

The self-contained city has a number of industrial parks, such
as Delta Silicon, Delta Technology Center, California Technology
Center and Multiguna Building, which provide different sizes of
offices and factories to both local and foreign investors.

Meanwhile, PT KIEC is pushing ahead with its infrastructure
construction projects at its expanded industrial area in
Tegalratu and Randakari villages, Cilegon, West Java, aside from
improving the existing infrastructure and facilities in the
industrial park. The infrastructure under construction includes
roads, drainage system, water supply system, and electricity and
telephone lines.

The KIEC's industrial expansion project, which covers some 74
hectares, started in 2002. "Two companies are already in
operation," said KIEC's head of public relations, Ike Nikita.

He said that although the infrastructure construction projects
in the expanded industrial park were still underway, several
domestic and foreign investors had expressed interest in setting
up plants on the site. "Negotiations are still underway," he
said, adding that the names of the prospective investors remained
confidential.

The KIEC is expected to attract more investors when the
Bojonegara international seaport, now under construction, is
ready for operation, said Ike.

The facility, located about 20 kilometers from the industrial
park, is expected to replace Tanjung Priok seaport. The
construction of the new port is scheduled for completion in 2007.

The KIEC, which was established in 1982, is a subsidiary of PT
Krakatau Steel. The industrial park covers an area of some 624
hectares, with 54 companies having set up shop there. Of these 54
companies, 50 percent are multinational companies. Most of them
are engaged in the upstream and downstream steel industry, and
the chemical and petrochemical industries.

Like other industrial estates, the KIEC also sells industrial
plots and factory buildings. The plots on sale range from 2,550
square meters to 470,100 square meters.

Investors have the option of purchasing or renting. "Following
the purchase of the land, we provide support and assistance to
investors to obtain land use permits (HGB) for 30 years, that
can be extended for another 30 years and then 20 years," he said.

The KIEC 's standard factory building (SFB) units have an area
of between 1,600 square meters and 2400 square meters. The
buildings are designed for production activities, including
fabrication, assembling of electronics products and electro-
plating.