‚Äú The government has extensively deregulated the sector which I see will provide a good foundation for attracting both short and long-term investments. I also see this combining well with the governmentís programme to make available basic infrastructure. ‚ÄĚ
ModernCikande is one of the largest industrial estates in the western part of Jakarta and we are currently carrying out ongoing efforts to better improve upon our facilities. As such, we have proceeded to commence several development plans which include building a hotel within our premises and developing a water treatment plant to serve our tenants. Furthermore, in cooperation with the regional government of Serang, we will also gain direct access to the main road network through the construction of a new exit gate from the toll road interchange, thus offering greater accessibility.
In engaging with our clients, we do not merely sell land lots, but we also act as a consultant. We provide full assistance from the planning phase of building a factory up until it is operational. This also extends to matters such as obtaining permits. The ModernCikande Industrial Estate has been assigned KLIK status by BKPM, one of 14 such estates, which enables tenants to directly build their factory without requiring them to obtain construction licenses. This means that once investors have obtained their principal license, they can proceed with the construction of their facilities immediately and obtain the permits in parallel with the construction. Moreover we recently launched our Modern Office Factory (MOF) project which offers a 3-in-1 concept office park that incorporates offices as well as ready-made factory units.
The government has extensively deregulated the sector which I see will provide a good foundation for attracting both short and long-term investment. I also see this combining well with the government’s programme to make available basic infrastructure. The challenge, however, is in implementing the changes as well as in waiting for the infrastructure to be ready as construction takes time. Another unfavourable condition is the global economic downturn which has slowed investment decisions, we ourselves experienced a decline in growth in the first-half of 2016 compared to the same period of the previous year. That said, the second semester of this year has shown better results.
The main difficulty in relation to any government programme is perhaps in making sure that they are implemented well. Indeed, the Joko Widodo administration may find it challenging to monitor the implementation of all his new regulations. That said, more often than not, the industry feels the need to give feedback to the government. For instance, the second economic policy package is supposed to offer a 30% discount on electricity for certain businesses, but in reality, obtaining this facility is not easy.
An important fact is that Indonesia possesses a large population. International manufacturing companies will see this country as a very promising market and consider establishing themselves here; this has been the case based on our experience.
The ModernCikande Industrial Estate occupies a strategic location west of Jakarta and has been recognised as the best-selling industrial estate in Jabodetabek by Colliers. This area itself is less congested compared to areas east of Jakarta. Another comparison is that this area has better reliability with regards to electricity as we get our supply from state electricity company PLN whereas areas east of Jakarta, get their supply from private electricity companies at a cost of 15% higher. It is worth mentioning that our industrial estate is very suited to accommodate companies engaged in downstream industries; especially manufacturers of chemicals and metals because of its close proximity to the heavy industries in the city of Cilegon, Banten. At present, many of our tenants are from the food and beverages industry, and building material manufacturers.
We are open to the opportunity. For instance, apart from our current site in Cikande, we are planning to build a new industrial estate in Bekasi, West Java, located not too far from the Marunda area; this location is ideal to be developed into an industrial estate with a port. In regards to developing this port, we are seeking to establish a joint venture with an experienced company possessing proven expertise in that field. Additionally, to accelerate the development of the industrial estate, we are also open to forming joint ventures that will have a hand in developing some parts of the land bank. We aim to commence this project within the next two years and if we are able to proceed successfully with this site, it will be an even more lucrative project than the one in Cikande seeing that it is situated closer to Jakarta compared to other industrial estates in the cities of Bekasi and Karawang.
Furthermore, a partnership with an international company can also bring advantages with regards to marketing our land lots. For example, a joint venture with a company from Japan can help us establish a network with other companies from that country and gain tenants for our industrial estate. ModernCikande and international firms can also gain knowledge through technology transfer initiatives.
International investors looking to invest in Indonesia should come and visit our industrial estate. Our site is a highly-prospective investment ground as we do not only sell land, but we can also assist you in setting up your production plant.