Many Factories Relocating to Central Java, Business Leaders Offer Key Notes

The wave of industrial relocation to Central Java in recent years is seen as an opportunity for the region to become a national manufacturing investment hub. However, business leaders have cautioned that several tasks must be addressed to ensure the incoming investment flow continues and grows.

“Accelerating the development of logistics infrastructure, strengthening ports, developing dry ports in Batang and Kendal, and integrating industrial estates with national and global supply chain networks are priority agendas that must be realised immediately,” said Bob Azam, Chairman of Employment at the Indonesian Employers’ Association (APINDO), in a statement on Friday (19/6/2026).

This comes amid a trend of industrial relocation that is not only inter-provincial, such as from West Java to Central Java, but also global, from China to the Southeast Asian region. Central Java’s geographic position at the heart of Java Island, its continuously growing industrial estates, and a conducive investment climate are seen as key assets.

“Amid the wave of global industrial relocation due to the China+1 strategy and rising production costs in several investment destination countries, Central Java is considered to be in a very strategic position to capture new investment flows and become a driver of national economic growth,” Bob said.

For context, China+1 is a strategy by Chinese companies to expand their business to other countries as a means of extending their supply chain, rather than concentrating solely in China.

The regional government has proposed port revitalisation to the central government. Additionally, the development of the Batang Dry Port has reportedly received approval as a logistics support facility.

Meanwhile, APINDO Expert Council member Anton J. Supit assessed that strengthening investment competitiveness does not depend solely on domestic factors. According to him, expanding export market access is also an important factor in increasing Indonesia’s attractiveness as a manufacturing investment destination.

“Investment needs to be supported by strengthening global market access, including through the completion and implementation of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), which has the potential to increase Indonesia’s attractiveness as an investment destination and export base,” Anton said.