Embarking on a business venture in Indonesia, East Java offers many opportunities. One you can find within the strategically positioned industrial parks dotting the region.
These industrial parks serve as dynamic hubs, providing a fertile ground for enterprises seeking to establish a strong foothold in this thriving economic landscape.
This comprehensive guide presents ten meticulously selected industrial parks that are prime choices for entrepreneurs and businesses looking to kickstart their ventures in East Java.
Explore these industrial parks to discover the ideal launchpad for your entrepreneurial aspirations in East Java.
What is an industrial park?
An industrial park, also known as an industrial estate or business park, is a designated area designed to host a variety of businesses and industries. Typically located on the outskirts of urban areas, these parks are structured to support industrial activities such as manufacturing, warehousing, and research and development.
The role of industrial parks?
- Resource Sharing: Industrial parks offer shared infrastructure, like roads, utilities, and waste management. This helps businesses reduce costs and work in a collaborative environment.
- Economic Development: Industrial parks contribute to local economies by creating jobs, attracting investment, and fostering related services like transportation and catering.
- Business Collaboration: With businesses in close proximity, industrial parks encourage networking, partnerships, and innovation through knowledge sharing and joint ventures.
- Regulatory Compliance: These parks follow specific zoning laws and safety standards, providing a controlled environment that minimizes environmental impact.
- Logistics and Distribution: Industrial parks are often strategically located near major transportation routes, streamlining the logistics of receiving materials and shipping products.
- Environmental Management: Industrial parks implement collective policies to manage waste and reduce pollution, promoting sustainable practices.
The business landscape in East Java
East Java’s economy offers a positive business outlook. During the second quarter of 2023, East Java’s economy grew by 5.24% compared to last year (YoY), surpassing the national economic growth rate of 5.17%.
This positive trend was supported by increased Foreign Direct Investment (FDI) and Domestic Direct Investment (DDI), government spending, and household consumption. The East Java economy significantly contributed to national economic growth at 14.45% and 25.23% to the economy of Java Island.
The manufacturing industry drives East Java’s economy
Based on data from Statistics Indonesia (BPS), in 2018, the manufacturing industry contributed 29.8% to the economy of East Java.
This figure increased to 30.7% in 2022, despite economic disruptions caused by the COVID-19 pandemic from 2020 to 2022. The manufacturing industry’s contribution in East Java to the national economy reached 25%.
In East Java, the manufacturing industry is primarily located in the Surabaya Raya region, which includes Surabaya, Sidoarjo, and Gresik. This region contributes to at least 50% of the province’s economy.
Manufacturing industries are also being developed in specialized areas in Pasuruan and Mojokerto.
How Industrial Parks Work
Industrial parks are areas where a variety of industries are located, providing a mix of production, transportation, and storage facilities. These can include chemical plants, plastics manufacturers, airports, food processors, and steel manufacturers.
Take the Wilmington Industrial Park in Los Angeles, for example. It’s near the Los Angeles and Long Beach ports—major international shipping hubs—and also close to railroads and highways. This setup allows for easy transport of goods by ship, train, or truck. Businesses there include cold-storage facilities, food distribution centers, and companies that make engine parts.
Why Industrial Parks Are Important for Commerce
Industrial parks are important because they bring together businesses that can benefit from shared resources and facilities. For example, ports within or near industrial parks let companies quickly move raw materials or finished products. Heavy equipment like cranes helps load and unload goods from ships onto trucks and trains. Industrial parks also often have warehouses for storage.
Manufacturers in these parks with port access have an edge—they can get the materials they need quickly and easily. This setup helps them produce their goods faster and distribute them more efficiently, keeping the supply chain running smoothly.
The benefits of choosing industrial parks
The Indonesian Government Regulation No. 24/2009 defines industrial parks as regions dedicated to industrial activities, complete with facilities and infrastructure, and administered by an industrial estate company.
These industrial estates are typically developed and managed by prominent, sometimes multinational, developers.
Establish a business in an industrial park offers a myriad of benefits, among others:
No construction license is required
Choosing an industrial park for your factory simplifies license approval and eliminates the need for a building permit. It saves money and speeds up your entry into the Indonesian market. Industrial parks often have environmental permits, unlike other restricted areas, such as residential zones.
Existing land
Acquiring and preparing land for a manufacturing plant can be challenging. Dealing with bureaucracy, often slow and complex, adds to the difficulty. Moreover, potential conflicts with nearby residents who claim your factory disrupts their peace can arise.
Therefore, opting for an industrial park that meets all regulations can help you sidestep conflicts, reducing stress and enhancing your business’s chances of success.
Alluring government incentive
Government Regulation No. 142/2015 offers tax incentives to investors in industrial parks. These incentives depend on the Industrial Development Zone (WPI) category.
They can involve exemptions or reductions in local government taxes like Land and Building Tax, Rights to Land and Buildings Fees, Street Lighting Tax, and more.
Read more: How Kendal Industrial Park attracts investors
Top 11 industrial parks in East Java
East Java offers several industrial parks for your business, such as:
1. Gresik Industrial Area (KIG)
This area covers 135 hectares, comprising 44 hectares of infrastructure land and 91 hectares of commercial land. KIG serves as offices, production centers, and warehouses for numerous manufacturers of electrical equipment, flour, gas, plastic, and steel.
2. Tuban Industrial Area (KIT)
Spanning 233 hectares, KIT is located at KM 22 on Tuban-Semarang Road. It operates under PT GIA and is an expansion of the Gresik Industrial Area.
3. Ngoro Industrial Park (NIP)
Situated on Ngoro Road in Mojokerto, this park covers 500 hectares of land. It was developed by PT Dharmala RSEA Industrial Estate, a joint venture between PT Intiland Sejahtera (Intiland Group, Indonesia) and RSEA Engineering Corp. (Taiwan).
4. Java Integrated Industrial and Ports Estate (JIIPE)
JIIPE is a project integrating deep-sea ports, industrial zones, and residential areas into a single package. Located in Gresik, it spans an area of 3,000 hectares, including 1,761 hectares for industrial purposes, 400 hectares for the port area, and 800 hectares for housing.
5. Maspion Industrial Estate (MIE)
Maspion Industrial Estate is one of the largest industrial areas in East Java, designed with a Total Integrated Facilities concept. It occupies 442 hectares of land at KM 25 on Manyar Road, Gresik.
6. Sidoarjo Rangkah Industrial Estate (SiRIE)
Covering 200 hectares on the Eastern Ring Road in Sidoarjo, SiRIE is a strategic hub for industries and warehousing.
7. Safe n Lock
Safe n Lock Warehouse and Industrial Complex is the largest industrial and warehouse complex in East Java, spanning 307 hectares in KM 5.5 of the Eastern Ring Road in Sidoarjo.
8. Pasuruan Industrial Estate Rembang
Managed by PT Surabaya Industrial Estate Rungkut (PT SIER), it is located in Pasuruan, East Java, with a land area of 563 hectares. It hosts over 90 companies and employs approximately 15,000 workers.
9. Surabaya Industrial Estate Rungkut
Also managed by PT Surabaya Industrial Estate Rungkut (PT SIER), this estate is in Surabaya, East Java, covering an area of 335 hectares. PT SIER offers different services, from industrial land plots warehouse rentals to industrial waste management.
Read more: Top 10 Batam industrial parks for foreign investments
10. Sidoarjo Industrial Estate Berbek
This estate is managed by PT Surabaya Industrial Estate Rungkut (PT SIER), is located in Sidoarjo, East Java, and spans 87 hectares of land. PT SIER stands as a testament to precision in industrial development and a beacon of opportunity for businesses seeking a promising location in the heart of East Java.
11. Kendal Industrial Park
Kendal Industrial Park is a leading industrial estate in Central Java, Indonesia, designed to accommodate a variety of businesses and industries. It offers a strategic location near major transportation networks, including highways and ports, making it convenient for companies to transport goods and source raw materials. Known for its modern infrastructure, Kendal Industrial Park also emphasizes sustainability and encourages collaboration among its tenants.
The park hosts a mix of manufacturing, logistics, technology, and research businesses, providing a dynamic environment for growth and innovation. It’s an attractive destination for companies looking to establish a foothold in Central Java’s thriving industrial scene.
Guide to Doing Business in Batam & Surabaya
Start your business with InCorp Indonesia
East Java is a strategic province for businesses, offering massive potential in the manufacturing sector, equipped with several industrial parks. The positive trend of East Java’s economy also encourages investors to explore business opportunities in those areas.
For businesses looking to establish a strong presence in Surabaya, InCorp Indonesia offers essential services, including company registration and business licensing, ensuring seamless operations in compliance with national and East Java’s specific laws and regulations.
Teddy Willy
Branch Manager – Surabaya Office at InCorp Indonesia
With 10 years of experience in business consultancy, Teddy Willy offers expertise in financial and production auditing, sales and marketing, channels and distribution, supply chain management, and human resources for every business sector in Indonesia.
Frequently Asked Questions
- Minimum salary of IDR 3.9 mil for the Jakarta region
- 12-day annual leave (minimum)
- BPJS coverage
- Holiday allowance
- Prohibit any form of discrimination and provide equal opportunity for Indonesians and expatriates
- Increase the competence of workers by giving or encouraging job training.
- Follow the termination procedures (Terminating an employee in Indonesia can be long, tedious, and expensive.
- Observe working hours, holidays, and overtime regulations
- Give mandatory employee benefits, including social security and health insurance
- Withhold only the right amount of income tax on behalf of the employees
- Follow the wages and other benefits outlined by the law
- Process work permits for foreign employees
The standard regulations state:
There are a few things to consider, such as:
As a professional executive search agent, InCorp helps promote job vacancies, screen, and shortlist applicants, conduct pre-interviews, and arrange final interviews with applicants. This can also be topped up with an employee background check.
As your HR outsourcing provider, InCorp signs a standard employment agreement with an outsourced employee. After this, we take care of the employee’s payroll in coordination with your company. InCorp is also responsible for paying the salary to the employee.
