An industrial complex equipped with real estate facilities is set for launch this week in Kendal, Central Java, with foreign investors setting sights on the area developed by an Indonesian-Singaporean joint venture.

The Kendal Industrial Park, to be inaugurated this week by President Joko “Jokowi” Widodo and Singaporean Prime Minister Lee Hsien Loong, is around 20 kilometers from each of the province’s landmarks: the capital city of Semarang, Achmad Yani International Airport and Tanjung Emas Port.

The planned integrated township, known by its commercial name “Park by the Bay”, will accommodate manufacturing companies in industries such as furniture, food, bicycles and building materials on an overall plot of 2,700 hectares, equivalent to more than 4,000 soccer fields.

As of now, the industrial complex has secured Rp 3.28 trillion (US$249.28 million) in investment commitment from 16 companies from Indonesia, Singapore, Malaysia, Japan and China. “More investments are coming. There have been many inquiries, including from South Korean companies,” Kendal Industrial Park CEO Ling Poon Lim told The Jakarta Post at his office over the weekend.

The company is a joint venture between Jakarta-listed industrial estate developer Jababeka and Singapore-based Sembcorp. Jababeka is known for its 5,600 ha Kota Jababeka in Cikarang, West Java, while Sembcorp’s portfolio covers industrial parks in Vietnam and China, as well as Batam in the province of Riau Islands.

President Jokowi’s administration, keen to industrialize Southeast Asia’s largest economy, aims to
boost manufacturing industries that are labor-intensive and have multiplier effects on the economy, which is struggling to meet the government’s 5.2 percent growth target this year.

The government can issue business licenses in three hours for companies that operate in an industrial area, employ 1,000 workers or more and invest at least Rp 1 billion. The fast processing of licenses is among numerous incentives introduced 12 economic stimulus packages issued since September last year.

The Kendal Industrial Park will be equipped with residential housing, shopping centers and shop houses, a convention center, a golf course and driving range, among other facilities.

Construction began just one year ago and is planned in three phases. The first phase, covering 860 ha, is scheduled for completion by 2020, followed by the construction of the second phase of 1,080 ha, and the third of 760 ha.

“We had a very late start, but this is, of course, a typical Singaporean approach; step-by step. You fulfill criteria A and move to point B and so on. If you jump, it might create some risk,” Poon Lim said.

The company also made sure that Kendal Industrial Park is equipped with reliable utilities and facilities, he said. For example, the firm would make sure that the industrial park, located right by the coast of the Java sea, was safe from floods.“On top of a reliable water and wastewater management system, we had land consolidation and also raised the land level by three meters for flood control. Companies are going to invest millions of dollars here, so we want to make sure that there is no flooding,” Poon Lim said.

Aside from industrial parks, Sembcorp also has extensive experience in municipal and industrial wastewater treatment and water management in countries such as Singapore, China, Chile and South Africa.

Further, Poon Lim explained, the company would make creative use of its land. For example, it would incorporate water reservoirs in the design of its community centers and golf course. A 42-kilometer cycling track is also planned.

Last weekend, trucks, heavy machinery and dozens of workers could be seen at the construction site. One building was completed, owned by Singaporean furniture producer Tat Wai, the first company to commit to invest in the industrial park.

Several other buildings are still under construction, including those owned by Malaysia’s APP Timber and local noodle producer Ganda Mie.

Tat Wai marketing executive Woei Xin said the company chose Kendal Industrial Park due to its location.

“Being in Central Java, Semarang is in between the two largest domestic markets of Indonesia. The location itself is already a plus point. Kendal Industrial Park has the additional advantage of being near Tanjung Emas Port, effectively reducing the time and cost spent on road transportation,” she told the Post over the weekend.

Xin said the project was just the company’s first phase of investment. “If the opportunity to grow and expand is there, we are prepared to invest further,” she said.

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Company profile

PT Kawasan Industri Kendal/Kendal Industrial Park

CEO : Ling Poon Lim

Shareholders : PT Jabebeka Tbk.  (51 percent),  Sembcorp Development Ltd (49 percent)

Location : Jl. Raya Arteri KM 19, Kendal Regency, Central Java

Area planned : 2,700 ha

Timeline

August 2012 : Joint venture agreement signed between Jababeka and Sembcorp

January 2013 : Land acquisition for phase one begins

March 2015 : Marketing sales

Mid-2015 : Physical development begins

May 2016 : Construction on  entrance completes

2020 : Phase one completes

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