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Indonesia prioritizes occupancy over new industrial estates

..global supply chain realignments present a strategic opportunity for Indonesia to position itself as an international manufacturing hub..Jakarta (ANTARA) – Industry Minister Agus Gumiwang Kartasasmita is redefining Indonesia's industrial expansion strategy by shifting the focus from raw land acquisition to tenant occupancy and operational performance.According to the minister, the success of industrial estate development in Indonesia should be measured by occupancy rates and investment attraction rather than the total number of estates built.”Adding estates without filling them means we are increasing supply, not increasing competitiveness,” Agus said at the National Working Meeting of the Industrial Estates Association (HKI) in Jakarta on Thursday.He emphasized that industrial estate managers can no longer operate merely as land providers or utility operators. Instead, they must evolve into comprehensive industrial ecosystems that offer investment facilitation, supply chain integration, innovation centers, workforce training, and support for green industry transitions.Over the past three years, the government has issued permits for 33 new industrial estates, bringing the nationwide total to 180.Collectively, these estates have attracted Rp6,800 trillion (approximately US$420 billion) in realized investment and created jobs for 2.36 million people.To sustain growth, Agus urged estate developers to strengthen their appeal to investors by focusing on three key pillars: streamlined licensing, robust supporting infrastructure, and a reliable energy supply, particularly from renewable sources. He noted that global supply chain realignments present a strategic opportunity for Indonesia to position itself as an international manufacturing hub.This momentum is supported by solid industrial growth. In the first quarter of 2026, Indonesia's economy expanded by 5.61 percent, with the manufacturing industry contributing the largest share of growth at 1.03 percentage points.Meanwhile, the manufacturing sector grew 5.04 percent year-on-year in the first quarter of 2026, up from 4.55 percent in the same period of 2025.Agus highlighted that manufacturing remains the backbone of the national economy, contributing 19.07 percent of Gross Domestic Product (GDP), accounting for 36.49 percent of total realized investment, generating 82.03 percent of non-oil and gas exports, and employing more than 20 million people.