Mega to inaugurate new industrial estates on Batam
Fadli, The Jakarta Post, Batam/Jakarta
President Megawati Soekarnoputri is expected to inaugurate four new industrial complexes on Batam next month, which will cover a combined area of 700 hectares and accomodate up to 30 foreign companies from various countries.
Chairman of the Batam Industrial Development Authority (BIDA) Ismeth Abdullah, said the opening of the new industrial complexes would bring the total number of industrial areas on the island to 18, housing 611 foreign companies.
"This shows that Batam is enjoying an investment inflow. It means that the investment flow into the island is outpacing that of areas outside Batam," Ismeth said on Wednesday.
The four new industrial areas are Tunas Industrial Estate, Panbil Industrial Estate, Citra Buana III and Latrade.
Ismeth said that there was a possibility that two additional industrial areas could also be launched next month if were completed in time. The two areas are Bintan II and Kabil Industrial Estate.
Meanwhile, Ismeth reiterated his concern over the slow progress in the deliberation of a bill which will declare the island, 20 kilometers from Singapore, a free trade zone (FTZ). The bill is currently under deliberation in the House of Representatives.
Ismeth feared that the prolonged deliberation would have a negative effect on investors' appetite for investing in the island, as they could see the lack of commitment on part of the government in luring investment.
"If the deliberation cannot be finished this year, I fear it will dampen the interest of the investors," he said, adding that so far, total investment in Batam has reached US$9 billion.
An FTZ status for Batam would mean that exporters operating on the island would be allowed to import raw materials without paying customs duties and taxes, pending their eventual processing, transshipment or reexport.
Batam was declared an industrial bonded zone in 1978 to lure investment and foster export competitiveness. Batam has become the country's main industrial center ever since, where 70 percent of economic growth is contributed by the export-oriented manufacturing sector.
The export value of the islands' output last year was over $6.5 billion, or about 14 percent of the country's total exports in a year.
According to Ismeth, some 60 percent of the total 611 foreign investment companies operating on Batam were in the electronics sector.