Japanese investors help boost industry expansion
The Jakarta Post, Jakarta
Business expansion by Japanese investors is largely to thank for the higher take-up in industrial space in Greater Jakarta during the first semester, according to a property market consultant.
PT Procon Indah reported recently that new industrial space built during this period totaled 83 hectares, a 137 percent rise over the same period the previous year, due to higher demand from producers of motorcycles and autos, as well as companies producing components for automobiles, motorcycles and household appliances.
"Motorcycles and automotive industries -- all Japanese companies -- dominated the demand," said Procon senior manager Rudy Halim. "This has been the case for the last 23 years."
Rudy said these car and motorcycle producers had acquired more land in industrial estates, mostly in Bekasi and Karawang.
The Jababeka, Lippo Cikarang, Suryacipta and Bukit Indah IndoTaise industrial estates absorbed more than 80 percent of the new take-up in Bekasi and Karawang, with the rest going to estates in Serang, Cilegon and Tangerang, according to the Procon report.
Indonesian Industrial Estate Association chairman Johannes Archiadi confirmed the Procon report, saying Japanese companies had historically been the major customers of industrial estates.
"They are the most loyal investors in the country," he told The Jakarta Post recently.
The picture was not all rosy, however. Of thousands of hectares of industrial land in the country, only 25 percent is being utilized.
"If infrastructure and regulation obstacles could be removed, the expansion in the estates would be faster," Johannes said, referring to frequent complaints of industrial estate developers of damaged roads and confusing regulations related to the implementation of regional autonomy.
He said the government should revise Presidential Decree No. 41/1996 on industrial estate, which he said was "out of date" and did not accommodate the regional autonomy law.
Despite the problems, however, Procon projects more industrial land will come on the market in the near future.
The report cited plans by the Bekasi Fajar Industrial Estates to open 65 hectares of saleable industrial land later this year.
Jababeka is also currently working on an additional 100 hectares in Bekasi that it expects to be finalized early next year.
Procon also projected the industrial land market would begin to see demand from other industrial sectors, such as building material suppliers and chemical manufacturers. (006)