Manufacturing Opportunities
and
Challenges in Indonesia
Lukman The
Chief Marketing Officer
Investment Promotion (Indonesia)
Sembcorp Parks Management Pte Ltd
© Sembcorp Parks Management Pte Ltd 2015
1
Indonesia
Singapore
Jakarta
Semarang
Surabaya
Central Java

Large Pool of Competitive Manpower

Population – 250 million (World’s 4th)

Population growth rate – 3.4 mil (1.4%) p.a.
© Sembcorp Parks Management Pte Ltd 2015
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Economic Data
Baa3
6%
US$5,200
GDP per capital
(Purchasing power parity
adjusted, 2013)
• Stable GDP
Growth
• Average 6% in
recent years
• Back to
Investment
Grade Rating
• Regained
investment credit
rating from Ba1
to Baa3
© Sembcorp Parks Management Pte Ltd 2015
• Strong domestic
consumption with
a rising middle
income group
3
Abundant of Manpower
Growing Trend of Working Population
Mil
300
250
205.8
203.5
228.5
225.6
222.2
219.2
217.9
215.3
212
244.47
241
237.6
231.4
247.95
200
Total Population
150
Employed Person
118.05
100
89.9
90.8
91.6
90.8
93.7
94.9
95.5
99.9
102.6
104.9
108.2
110
118.19
Employed Person
(Less than 35hours a week)
50
31.8
30.2
31.4
30.9
30.2
0
© Sembcorp Parks Management Pte Ltd 2015
32.1
31.5
32.7
33.3
31.6
33.3
34.6
34.3
36.81
Source : BPS
4
Abundant of Resource
Production and proven reserve amount of Major Natural Resources
Proven Reserved Amount
Type or
Recourses
Total
Share
Rank
Total
Share
Rank
Oil
4 bil barrel
0.2%
28
942,000 barrels/
day
1.1%
20
Natural Gas
104.Tcf
1.4%
15
7.3bcf / day
2.3%
10
Coal
5.5 bil Ton
0.6%
13
325 mil ton
5.1%
6
OIL Production / Consumption
Natural Gas Production / Consumption
Million ton
80
60
40
20
0
Production
70
60
50
40
30
20
10
0
Consumption
Production comparison of OIL, Natural Gas and Coal
500
Million ton
100
Million ton
Production
400
300
200
100
0
Production
Consumption
Oil
Natural Gas
Coal
Production and proved reserve amount of other resources besides Coal
Type of
Resource
Unit
Alloy
Proved Reserve amount (2011)
Production amount (2011)
Total
Share
Rank
Total
Share
Rank
Ton
800,000
16.3%
2
42,000
17.2%
2
Copper
1000 ton
28,000
4.1%
8
543
3.4%
9
Nickel
Ton
3,900,000
5.2%
7
290,000
14.9%
1
Bauxite
1000 ton
900,000
3.2%
6
37,100
14.3%
3
© Sembcorp Parks Management Pte Ltd 2015
Above
Source : BP Statistical Review of World Energy 2014
Left
Source : USGS
5
Growth Rate of Real GDP
Less fluctuation stable economy growth
20
15
Indonesia
10
7.82
5
4.7
0.79
0
China
5.69 5.5 6.35 6.01 4.63 6.22 6.49 6.26 5.78 5.16
4.2 3.64 4.5 4.78 5.03
India
Singapore
Thailand
-5
Malaysia
-10
-13.13
-15
Source : IMF
Market Trend of Durable Goods
Car
1400
1200
1000
800
600
400
200
0
1116
765
483
604
534
319
434
Motor Bike
,000
,000
1000
1230
894
600
486
740
800
Car
400
509
389
628 588
804
706
774
447 471
Motor Bike
200
0
Source : GAIKINDO
© Sembcorp Parks Management Pte Ltd 2015
Source : AISI
6
Market Trends of White goods
7000
,000
6000
5000
4000
3000
2000
1000
0
2004
2005
TV
2006
Fridge
2007
2008
Washing
Machine
2009
2010
2011
Air con
Source : EMC, GABEL
© Sembcorp Parks Management Pte Ltd 2015
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Demographic Trend
Indonesia
From 1975 to 2030 (55 years)
China
2030~
From 1970 to 2015 (45 years)
India
2015~
From 1970 to 2045 (75 years)
2045~
Singapore
From 1970 to 2015 (45 years)
2015~
Thailand
From 1970 to 2015 (45 years)
2015~
Japan
From 1930 to 1995 (65 years)
1930
1940
1950
1960
1970
1995
1995 ~
1980
1990
1995
2000
2010
2015
2020
2030
2035
2040
2045
2050
Working population (age between 15 ~ 64 years old)
Risk of declining in the working population
Source : Euromonitor International from National Statistics
Indonesia’s Middle Income
(Household disposable income US$ 5,000 ~ US$ 35,000 annually)
Year 2009 : 80 million
Year 2020 : 190 million
Source : Euromonitor International 2010
© Sembcorp Parks Management Pte Ltd 2015
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Some challenges...
1. Emerging countries competing for FDIs (Vietnam, Myanmar, the
Philippines, Cambodia, Thailand, India, China)
2. Commitment of the Indonesian government to achieve the targeted
GDP growth of 5.8% for 2015
-90% of the budgeted expenditure for 2015 has to be absorbed
-Promote FDI into the country
3. Implementing structural reforms aimed at transforming the civil
service to be more customer centric
4. Need to build massive infrastructure (Roads, Ports, Utilities, etc)
© Sembcorp Parks Management Pte Ltd 2015
9
Sembcorp Development Projects
in Indonesia
1990
Batamindo Industrial Park
(No longer managed by SCD)
1994
Bintan Industrial Estate
(No longer managed by SCD)
2013
Kendal Industrial Park
(2700 ha)
© Sembcorp Parks Management Pte Ltd 2015
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Kendal Industrial Park
A Cost-Competitive Location for Global Market
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About Developers
Sembcorp
A Singapore Government-Linked Organisation
(49.5%)
© Sembcorp Parks Management Pte Ltd 2015
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Sembcorp
October 1998
Temasek Holdings (49.5%)*
Public Shareholders (50.5%)
100%
100%
Utilities
Urban Development
60.6*%
Public
Shareholders
39.4%
Marine
* As at July 2013
© Sembcorp Parks Management Pte Ltd 2015
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Positioned in key growth areas
11 projects in
700 tenants
US$14bn in direct
3,579 ha
Vietnam, China
and
Indonesia
VIETNAM
comprising MNCs
and leading local
enterprises
investments attracted
CHINA
to our
integrated
developments
remaining
saleable land
Vietnam
China
5 projects strategically located in the
southern, central and northern economic
zones
Key growth
regions. Well
placed to benefit
from shift
towards centralwestern China
development
Enhancing
value through
selective C&R
developments
Java, Indonesia
Central Java expected
to benefit from
investment spillovers
from Jakarta
*Sembcorp also pioneered the developments of Batamindo Industrial Park and Bintan Industrial Estate
© Sembcorp Parks Management Pte Ltd 2015
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Our Business Model
Value Creation
Industrial Park Model
Urban Development Model
Land Developer
Land Developer
• Industrial land sales
• Industrial land sales
• Commercial & Residential land
sales
Real Estate Developer
Real Estate Developer
• Ready-built factories (RBF)
• Built-to-suit factories
• Commercial & Residential
- Within the Parks
- Around the Parks
• Ready-built factories (RBF)
• Built-to-suit factories
Facilities Management
Facilities Management
Utilities
Utilities
1990
© Sembcorp Parks Management Pte Ltd 2015
2007
Future potential
16
PT Jababeka Tbk
•
•
Established in 1989 and listed in Jakarta Stock Exchange
Other businesses include power plant (PT Bekasi Power) and logistics (PT Cikarang Dry
Port)
Leading Industrial Township
Developer in Indonesia
Kota Jababeka
Cikarang
5600ha
Jakarta
Tanjung
Lesung
1500ha
Tanjung Lesung
© Sembcorp Parks Management Pte Ltd 2015
Kota Jababeka
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Indonesia
Central Java
Semarang
Right Place, Well Positioned
Amenities
Cultural & Tourism
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Good Living
Leisure & Relax
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Central Java
•
Area: 39,800.69 km2
•
Population: 32.9 million which provides a young and
technically trained workforce
•
GDP Growth (2013): 6%
•
Provincial Capital: Semarang
SEMARANG
SURABAYA
SOLO
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Central Java Offers Higher Education Level
Home to many Vocational Training Institutes
Garment
Vocational Province
1.189 Vocational Training
Institutes
(150.000 graduates / year)
274 Universities, 20 Polytechnics
(103.000 graduates / year)
Training Centre
(1200 graduates / year)
Electrical & Electronics
© Sembcorp Parks Management Pte Ltd 2015
Carpentry
Automotive
IT
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International Airport in Semarang
Ahmad Yani International Airport
Direct Flight:
Singapore – Semarang : 2h05mins
Jakarta – Semarang : 55mins
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International Sea Port in Semarang
Tanjung Emas (3rd largest Sea Port in Indonesia)
The Export data as of June 2014
reported by Statistical Board of
Central Java
CHANNEL
-10 M
BASIN
-10 M
United
States
China
Japan
21%
Germany
13%
9%
3%
4% 7%
3%
3%
SAMUDERA
WHARF
Malaysia
31%
3%
BASIN
-9 M
CONTAINER
TERMINAL
Singapore
BASIN
-7 M
NUSANTARA
WHARF
BASIN
-6 M
EX PLTU
WHARF
Korea
Turkey
BASIN
-6 M
CPO WHARF
3%
Taiwan
United
Kingdom
Other
countries
© Sembcorp Parks Management Pte Ltd 2015
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Manufacturing Industry Sectors
in Semarang
Manufacturing Industries in Semarang Area
Source: Colliers International Indonesia – Research and Advisory in 2013
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Working-Living Environment
City Centre
Residential
Township
Golf & Country Club
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Accommodation
Borobudur Temple
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Kendal Industrial Park
Cost Competitive, Integrated, Sustainable
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Strategic Location

International Airports:
Ahmad Yani Airport – 20 km

Semarang City : 21 km

International Seaport :
Tanjong Emas Port – 25 km
© Sembcorp Parks Management Pte Ltd 2015
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Kendal Industrial Park
Phase 1 (860 Hectares)
On-site Port
Waste-water
Treatment Plant
Proposed Power
Plant
Industrial Land Plots
Commercial &
Residential
Ready-built
Factories
© Sembcorp Parks Management Pte Ltd 2015
•
Total Development: 2,700 Hectares
•
Mixed use development: encompassing mainly
industrial use, as well as residential &
commercial
•
Water-front land: facing northern coast of
Central Java
27
Target Industries
Garment, Textile
& Leather
Products
Abundant
teak wood raw
materials
Consumer
Electronics /
Automotive
Parts
Wooden
Furniture
Heavy
Industries /
Steel
Food
Processing
Ideal sea front land for mineral ores
processing/smelting
Basic Chemical
Consumer Care
© Sembcorp Parks Management Pte Ltd 2015
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Competitive Manpower - Kendal
Kendal Minimum Wage :
2015 : Rp 1,383,450 per month (USD 110)
(Exchange rate used is US$1 : Rp 12,500)
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One-Stop-Service
Kendal Industrial Park provides total customer support for
fast start-up and hassle-free operation
Manpower
Recruitment
Assistant
Business
Licence
One-Stop
Services
Estate
Maintenance &
Security
© Sembcorp Parks Management Pte Ltd 2015
Logistics
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Excellent Infrastructure
Kendal Industrial Park will be equipped with international standard infrastructure and supporting amenities to
take care of your business needs
• Prepared land plots for custom-built factory
• Ready-built factories
• Reliable electricity, water & waste-water treatment
• Executive housing with full-fledge amenities
• Well-managed worker dormitories
Prepared land plots
Ready-built factories
© Sembcorp Parks Management Pte Ltd 2015
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Milestones
JVA Signing
- Investors to start building factories
- Absorption of workforce
2020
2013 & 2014
2012
Begin Phase 2 (1910 Ha)
2020 beyond
2014 & 2015
- Land Resettlement & Infrastructure
Development for Phase 1 (860 Ha)
© Sembcorp Parks Management Pte Ltd 2015
Completion of Phase 1
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We welcome you to be our partner
Thank You
© Sembcorp Parks Management Pte Ltd 2015
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