Saturday, September 16, 2006

Industrial Estates controversy

Government's plan to force manufacturers relocate plants to industrial estates has created a controversy. Those who oppose the plan accuse government of giving too much power to the industrial estate developers, while the supporters said the plan would be for the best of manufacturers themselves. What's up?

Government is drafting a regulation on industrial estates scheduled for implementation by 2010. In the next few years, plants should be relocated to industrial estates. If by 2020 these plants still outside the industrial estate, government will impose administrative sanctions such as freezing the extension license, means they can't grow further. Not all plants should abide the regulation. Exceptions applies to petrochemicals, cement, and mining.
Industry minister Fahmi Idris argued industrial estates with good infrastructure would accelerate production as things would be made easier for them to get raw materials and necessary licenses. Government also argued better environmental impact management inside the industrial estates.
As reported by Kompas today, there are 83 industrial estates developed in 24 cities across the country with occupancy rate of 40%. The new regulation would definetely increase the occupancy rate.
Industry players responded the draft regulation with criticism. No way that government could force them to relocate. Should be market driven, they said. Any forced relocation would make the cost at industrial estates jump significantly as people have no choice.

Major industrial estates that might get benefit out of government's plan:
1) Jababeka (listed)
2) Kawasan Industri Gresik (state-owned)
3) Kawasan Industri Sentul (private)
4) Kujang Industrial Estate (state-owned)
5) Krakatau Industrial Estate Cilegon (state-owned)
6) Kota Bukit Indah Industrial City (private)
7) Lippo Cikarang (listed)
8) MM2100 Industrial Estate (private)
9) Surya Cipta Industrial Estate (private)
10) Surabaya Industrial Estate Rungkut (state-owned)
11) Wijaya Kusuma (state-owned)
12) Batamindo Industrial Park (private)
13) Kabil Industrial Estate
14) Cilegon Industrial Estate (Jababeka subsidiary)
15) Medan Industrial Estate (state-owned)
16) Makassar Industrial Estate (state-owned)
17) Kawasan Industri Bontang (state-owned, subsidiary of PT Pupuk Kaltim)
18) East Jakarta Industrial Park (private)

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