Government Encourages Investment Into KI Ladong Project

JAKARTA – The government is encouraging investors both domestic and foreign to invest in the Ladong Industrial Estate project (KI Ladong) in Aceh, as it is one of the strategic projects that is deemed a priority within the government's 2020-2024 Mid-Term Working Plan (RPJMN).

Currently, KI Ladong has a total land area of 66.89 hectares with around 17.5 hectares deemed immediately ready for use. In addition, the area provides some basic infrastructure such as roads, management facilities, as well as energy and water networks that are connected to the PLN (electricity) and PDAM (water) grids.

"The existence of an industrial area or industrial sector activity in that area will have a broad and positive effect on the local and national economy. It is hoped that the construction of the factory until the first production in April 2022 can go according to plan so that it can participate in increasing economic growth in Aceh," the Industry Ministry's (Kemenperin) Director General of Resilience, Regional and International Industrial Access (KPAII) Eko SA Cahyanto said in a written statement on Thursday (18/11).

Furthermore, according to the Kemenperin's Director of Industrial Regions Adie Rochmanto Pandiangan added that investment development efforts at KI Ladong are currently going forward positively. Sectors to be developed include the palm shell processing industry, with a goal to produce more export-oriented products.

"Currently, a utility network is being built to support industrial activities as well as the maturation of an area of around 2 hectares at the construction site," he said, adding that there is also the Malahayati Port area that can be developed further, around 12 km from the KI Ladong site.

"PT Pelindo as the port operator has stated its readiness to support the plan for the construction of the first tenant and expect other tenants to the KI Ladong to enter immediately so that port utilization will increase, Adie said. Based on Law no. 142/2015 on Industrial Estates, both the central and regional governments are providing the industrial infrastructure and supporting infrastructure in accordance with their respective authorities.

Adie added that the support for the provision of infrastructure by the government is very much needed in order to be able to attract industrial investment into KI sites, especially for PT PEMA, who are a regionally-owned enterprise (BUMD) and whose main source of funding tends to be limited to due its status as a BUMD.

He explained that the natural resources around KI Ladong must be utilized efficiently for its operations, which include a geothermal source around 25 km away, natural gas resources from both Arun and other similar locations, as well as the water reservoir in Krueng Raya which can be developed through a gravity system so that it is able to make distribution costs more efficient.

To accelerate the development of KI Ladong and lure foreign investment into the project, several strategies would need to be carried out, one of which is the establishment of a halal industrial cluster and establishing KI Ladong as a national Halal industry hub.

"As we all know, the Aceh province has special privileges related to the implemented of Sharia Law in its region, and its location at the edge of Western Indonesia could bolster a strong brand image so that it can potentially interest export markets in the Middle East," Adie noted.