Government Calls for Acceleration of Halal Industrial Zone Development

JAKARTA – In order to achieve the target of having Indonesia become one of the world’s leading halal goods producers, the government insists that the development of industrial halal zones and estates must be accelerated.

This can be done through several investment incentive strategies, as well as by categorizing halal industry zones (KIH) as official special industrial zones (KEK).

Industry Minister Agus Gumiwang Kartasasmita explained that these investment strategies can be done in the form of covering the administrative costs for prospective tenants, such as the halal certification fee for small-to-mid scale industries (IKM).

“We are also working together with the United Arab Emirates, communicating to them that Indonesia currently has 3 official halal industry zones, which is ready to take on their investment,” Minister Agus said in a written statement on Tuesday (11/5).

The minister added that the goods produced by Indonesia’s halal industry zones are made for both the domestic and the export markets. Furthermore, Indonesia’s halal goods have seen larger demand from various markets around the world. “However, the problem is that our KIHs have yet to be developed as well as we hoped,” he said.

To help improve the development of Indonesia’s KIHs, substantial investment to build or enhance facilities such as testing laboratories, dry ports and logistics are needed. Considering these specific demands, Minister Agus said that the government is now more committed to developing the country’s halal industry, following the wishes of Vice President Ma’ruf Amin for a sustainable halal industry.

To achieve this, support is needed from several related parties to offer attractive and progressive incentives in order to pull in investment. “The Industry Ministry (Kemenperin) will keep working with relevant stakeholders in the halal industry to fulfill the goals of KIH development,” the minister elaborated.

Following a survey of the Halal Modern Valley in the Cikande Modern Industry Zone (KIH Cikande), the minister concluded that the zone itself will be developed into Indonesia’s first ever integrated halal industry cluster, and will become the largest in the country, spanning over 500 hectares. The Halal Modern Valley KIH is an area equipped with the systems and facilities necessary to produce halal products that meet Syariah principles.

The supporting facilities that are both available and will be available at KIH Modern Cikande will be integrated, from research and development facilities, a food technology polytechnic institution, a halal quality management center, a Syariah finance center, and a port. There are also plans to open a customs facility.

Minister Agus explained that the development of the site will be done in three phases over five years, with the first phase involving the development of the first 150 hectares, the second involving another 150 hectares and the third involving the development of 200 hectares. The first phase of development began on October 2019.

“Based on the masterplan, KIH Cikande will be developed into a halal industry cluster, providing a complete ecosystem from upstream to downstream, including a logistics system that will help further the goals of Indonesia becoming an international halal hub,” he said.

Regarding the halal infrastructure, the KIH Halal Modern Valley operators have partnered with the Halal Certification Agency (BPJPH) and the Indonesian Ulema Council’s Assessment Institute for Foods, Drugs and Cosmetics (LPPOM MUI) to help develop and design the integration of the KIH.

“To accelerate its development, the Kemenperin has issued an official statement letter for the development of the KI Modern Cikande zone on 2 September 2020, which has been verified by the Kemenperin, the Religious Affairs Ministry (Kemenag) and the Indonesia Ulema Council (MUI) based on the Kemenperin’s decree no. 17/2020 on Procedures for Obtaining Certificates for the Development of Halal Industrial Zones,” Minister Agus said.

As a way to gather major global halal industry figures to work together to improve the supply chain, innovate and promote the halal industry to the world, Indonesia has signed a partnership with several halal hubs abroad including the Cordoba Halal Park in Spain, and the Iskandar Halal Park and the Penang International Halal Hub in Malaysia.

“The government has also encouraged both large-scale industries and IKMs to work together at KIH Cikande. One of their partnerships involve the preparation of a special e-commerce platform to serve the tenants of the Halal Modern Valley, made in partnership with the Nahdlatul Ulama (NU) and the Indonesian Food and Beverage Producers Association (GAPMMI),” the minister said.

Aside from KIH Cikande in Banten, Indonesia’s two other KIHs are the Safe n Lock Halal Industrial Park in Sidoarjo, East Java and the Bintan Inti Halal Hub.