THOUGHT LEADERS

INDONESIA TO COMMENCE CONSTRUCTION OF MAJOR INDUSTRIAL AREAS IN NORTH KALIMANTAN

Groundbreaking Set for Next Month; Project Aims for Completion in Four Years

18.06.2024
BY SALMA S.A.
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Indonesia is set to break ground on a significant industrial development in North Kalimantan, with construction slated for completion in four years. The ambitious project, spearheaded by Indonesian Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan, aims to transform the region into a major industrial hub.

During a meeting with the National Development and Reform Commission (NDRC) in Shanghai on June 16, 2024, Luhut expressed optimism about the project's timeline. "From the meeting with the NDRC, we hope to start the groundbreaking in the next month and commence the construction. I believe the construction will be concluded in four years,” Luhut stated, as quoted by Antara.

The announcement followed Luhut's recent working visit to China, where he engaged in discussions with key Chinese officials and business leaders. His itinerary included meetings with Chinese Foreign Minister Wang Yi, NDRC Head Zheng Shanjie, officials from Tsinghua University, and various Chinese entrepreneurs.

A pivotal topic of Luhut's discussions was securing support from the NDRC for the North Kalimantan industrial area. During his meeting with Zheng Shanjie, Luhut highlighted that the industrial zone would feature one of Asia's largest petrochemical factories, with a production capacity of 4x16 million tons per year.

The project was previously addressed in a bilateral meeting between Indonesian President Joko Widodo and Chinese President Xi Jinping on July 27, 2023. The leaders discussed collaborative opportunities for companies in the petrochemical and hydropower sectors in North Kalimantan.

Spanning approximately 30 hectares in Bulungan Regency, the green industrial area is poised to attract an investment of up to US$132 billion (around Rp2,174 trillion). Its strategic location, 185 kilometers from the Nusantara Capital City (IKN), adds to its significance.

In addition to the massive petrochemical facility, the industrial area will host several other key manufacturing plants. These include an alumina smelter with a capacity of three million tonnes, an iron and steel factory with a capacity of five million tons per year, an EV battery factory, and a polycrystalline silicon factory with a capacity of 1.4 million tons.

The development of these facilities underscores Indonesia's commitment to advancing its industrial capabilities and fostering sustainable growth. The project is expected to create numerous job opportunities and boost the region's economic landscape.

As Indonesia forges ahead with this transformative initiative, the collaborative efforts between Indonesian and Chinese stakeholders will be crucial in realizing the vision for North Kalimantan's industrial future.

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