20 September 2019 (closed)
USD/IDR (14,085) -14.00 -0.10%
EUR/IDR (15,570) +14.13 +0.09%
Jakarta Composite Index (6,231.47) -13.00 -0.21%
Industry players in Jakarta are somewhat relieved after Jakarta Governor Basuki Tjahaja Purnama (Ahok) signalled that he will allow a revision to the mandatory relocation of local industries to designated industrial zones. Based on Regional Regulation No. 1/2014 on Detailed Spatial Planning and Zoning Regulations, all local industries in Jakarta have to be (re)located into the designated industrial zones before 1 January 2017. Ahok is now expected to extend the deadline to the end of 2019.
Jakarta authorities want to enhance the orderly organization of local industries and therefore designed Regional Regulation No. 1/2014. Currently, there are many small and mid-sized industries with factories or production facilities in non-industrial zones (for example in residential areas). The new regulation was not well received by local industries. Many industrial players complained that the new regulation would seriously hurt their business as the move to an industrial zone implies high costs and could raise logistics costs or even disrupt relations with existing clients.
Edward Napitupulu, Head of the Industry Division at the Jakarta Industry and Energy, says the Jakarta administration will raise efforts to improve infrastructure on and around these industrial zones in order to make the move more attractive. Local authorities will also make it easier to obtain all permits necessary to establish new local industrial zones.
There is one important point regarding the deadline of the mandatory relocation of local businesses to designated industrial zones: only companies that were already active prior to the signing of Regional Regulation No. 1/2014 are allowed to postpone their relocation until late 2019. Those businesses that established production facilities after the signing of the regulation are still required to relocate to industrial zones before 1 January 2017.
Currently, Jakarta's industrial centers tend to cluster in East Jakarta. Here are especially many clothes, shoes and metal industries.