Two Special Economic Zones in Batam Start Absorbing Thousands of Workers
Two special economic zones in Batam absorb more than 4,000 workers. Batam's location is close to. Singapore and being on the world's busiest shipping lane are the determining factors for the growth of investment in the region
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Workers are repairing aircraft components at the aircraft maintenance, repair, and overhaul (MRO) facility of PT Batam Aero Technic at Hang Nadim Airport, Batam, Riau Islands on Wednesday (14/8/2019).
BATAM, KOMPAS - Two special economic zones in Batam, Riau Islands, have begun absorbing thousands of workers. The government has promised to build infrastructure and improve licensing services to encourage investment. Entrepreneurs hope that the issue of high port tariffs will be resolved soon.
Head of Batam Investment Agency (BP) Muhammad Rudi stated that the Batam Aero Technic Special Economic Zone (KEK) has absorbed 1,636 workers. Since its establishment in June 2021, the KEK Batam Aero Technic has also absorbed an investment of IDR 607.5 billion.
"The progress of Batam Aero Technic KEK will be continuously driven to achieve the target set by the Coordinating Minister for Economic Affairs, namely investment of Rp 7.29 trillion and a workforce of 9,976 people by 2030," said Rudi through a written statement on Friday (28/7/2023)."
Currently, the Batam Aero Technic SEZ has become a workshop for aircraft from 12 domestic and international airlines. According to Rudi, the business opportunities for aircraft maintenance, repair, and inspection (MRO) are very promising as there are about 12,000 aircraft operating in the Asia Pacific region.
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Mayor of Batam Muhammad Rudi attended the inauguration of the Santika Batam Hotel in the Riau Islands on Thursday (20/10/2022).
The aircraft MRO at Batam Aero Technic SEZ is a collaboration between Lion Group and Garuda Indonesia Group. Batam was chosen as the location to establish the MRO due to its close proximity to Singapore. The ordered aircraft components will arrive in Batam in less than two days.
The operation of MRO in Batam is also mentioned to be able to save domestic airline expenses up to Rp 10 trillion per year. The maintenance and repair costs of aircraft are about 7-8 percent of the total operational costs of an airline.
"I am preparing a number of infrastructure to support investment. Hopefully, this will have a positive impact on economic growth," said Rudi.
Also read: Domestic Aircraft Workshops Help Airlines Be More Competitive
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The atmosphere at Infinite Studio film studio, located in the Nongsa Special Economic Zone, Batam, Riau Islands, on Friday (4/11/2022).
In addition to Batam Aero Technic SEZ, workforce absorption is also reported in the Nongsa SEZ. During January-June 2023, the Nongsa SEZ, which is engaged in digital technology, absorbed 2,618 workers.
Based on BP Batam's data, there are 17 companies that have invested in the Nongsa SEZ. The current value of investment has reached IDR 2.49 trillion.
During a visit to Batam in December 2022, Acting Secretary General of the National Council for Special Economic Zones (KEK), Elen Setiadi, stated that the government is targeting KEK Nongsa to be able to absorb Rp 40 trillion worth of investments by 2030. She hoped that KEK Nongsa could establish closer cooperation with Singapore. The aim is to enable the area to grow as a digital industry hub both regionally and internationally.
Also read: Government Pushes Digital KEK in Batam to Raise IDR 40 Trillion Investment
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GDS Holdings CEO William Huang (second from left) attended the groundbreaking ceremony of a 20-megawatt capacity data center construction project in the Nongsa Digital Park area, Batam, Riau Islands on Thursday (14/7/2022).
Currently, there are three data centers located in the Nongsa SEZ. One of the data centers in the Nongsa SEZ belongs to the Ministry of Communication and Information Technology, while the other two data centers belong to foreign companies.
The first one is a data center owned by a Singaporean company called Data Centre First, with a capacity of 30 megawatts (MW). The second one is a data center owned by a Chinese company called GDS Holdings Ltd, which has a capacity of 28 MW.
In addition, in Nongsa Special Economic Zone, there are also three digital technology academies that develop young talents to be competitive in the fields of application development, cyber security, cloud computing, and artificial intelligence. The three academies are Apple Academy, Royal Melbourne Institute of Technology Academy, and IBM Academy.
Regarding the growth of Nongsa SEZ, Rudi is optimistic that the area will have a significant economic impact on the region in the future. He will continue to support the development of Nongsa SEZ by providing fast and easy permit services.
Also read: Batam Entrepreneurs Protest Port Rate Increase
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A number of ships passed through the Singapore Strait near Batu Ampar Port, Batam, Riau Islands, on Sunday (10/3/2021).
Separately, the Chairman of the Indonesian Entrepreneur Association (Apindo) Batam, Rafki Rasyid, assessed that Batam's close relationship with Singapore is the main key. In addition, Batam's status as a free trade zone is also considered to contribute to the growth of investment.
"Nevertheless, the government needs to maintain the investment climate in Batam to remain conducive and competitive. Investors should not feel worried or doubt their decision to invest in Batam," said Rafki.
Lately, according to Rafki, businessmen in Batam have been complaining about BP Batam's decision to raise container loading and unloading rates at the Batu Ampar Port. The policy is considered uncompetitive and makes the export industry in Batam unable to compete with industries in other countries.
Rafki regrets that the issue of high container shipping tariffs, which has repeatedly been complained about by businesspeople, has not been resolved.
"If this problem is not resolved, investment in Batam will decrease," he said.
