What are the impacts and challenges of industrial estates in Indonesia?
According to Prof. Pradono, Professor of SAPPK ITB, Industrial areas can be a vehicle for regional development and investment opportunities. However, some impacts must be considered:
- The conversion of paddy fields into a built area
- Environmental pollution
- High migration
- The work force is increasing
- Shifting cultural values
- Social resistance
- Changes in livelihoods from agrarian to industrial sector,
- Expanding employment
- Reduce unemployment
- The industry supports the provision of transportation and housing facilities.
What are the prospects for Industrial Estate investment after the COVID-19 pandemic?
The second topic was discussed by Mr. Dani Indra as Director of the Advisory Group of Coldwell Banker Indonesia. According to his data, the industrial sector has a vital role because it contributes the highest GDP of 18.6%, with the future target of touching 20%. Therefore, the industrial sector is now a development priority by the government. The presence of COVID-19 has had enough of an impact, with a 50% reduction in industrial estate demand in 2020. In 2021, industrial estate investment will begin to recover but not entirely. From observations, the industrial sector is currently still quite good compared to other properties. So far, traditional sectors such as FMCG, automotive, chemical, and others are still running. Still, there is new demand, which is IT-based industry and high tech-based industry such as the electric vehicle industry.
Take a look at the case study on the Kawasan Industri Terpadu Batang development!
This case study was brought directly by the GM Business Operations PT. PP Persero KIT Batang, Mr. Angga Brahmana. The background of the construction of the Batang KIT is Indonesia's low competitiveness in the industrial sector compared to other countries, with evidence that 33 Chinese companies did not choose Indonesia to invest in the industry sector in 2019. Finally, an idea was made for an investment-friendly area and adequate infrastructure. One of the plans is the Batang KIT which is currently in phase 1 of development. Several investors have entered with a total 'deal' land of 73.4 ha. In addition, KIT Batang also built a business complex, commercial area, and public facilities such as a mosque to complement this area. KIT Batang aims to provide a multiplier effect on the Indonesian economy of 0.411. So that every 1 rupiah produced can be 1.411 rupiahs. In addition, at the end of phase 1 development in 2030, KIT Batang targets to provide employment to 54,715 workers and continue to increase to 233,730 workers by the end of phase 3 in 2050.
If you want to watch the entire discussion, please click this link.