Establishing a medical device manufacturing facility in Central Java provides a strategic advantage for accessing Indonesia’s expanding healthcare market. The region is a preferred destination for medical device manufacturers due to its skilled workforce, cost-effective production, and supportive government initiatives.
This guide walks you through the essential requirements and processes for starting a medical device manufacturing company in Central Java to optimize your business expansion plan.
Medical device industry in Indonesia
The medical devices industry in Indonesia is expected to generate revenue of approximately USD 2,189.00 million in 2024. The demand for cardiology devices among its segments, with an estimated market value of USD 324.10 million in the same year, spearheads this projection.
The market is predicted to grow at an annual rate of 7.82% between 2024 and 2029, reaching a total value of USD 3,189.00 million by the end of this period. The United States is globally forecast to dominate the market, with revenue of USD 181.00 billion in 2024.
Indonesia’s rising demand for advanced medical devices is fueled by improvements in healthcare infrastructure and a growing focus on enhancing patient care. As the market expands, opportunities abound for domestic and international medical device manufacturers.
Read more: Unveiling the prospects of the cosmetic industry in Indonesia
Why choose Central Java for medical device manufacturing?
Central Java’s economy strongly relies on manufacturing, which accounts for 30% of its GDP. Therefore, it shows some potential to be a hub for It is emerging as a hub for medical device manufacturing companies.
In supporting the scene, key industries in the province include textiles and garment production, which represent 56% of investments, as well as non-metallic minerals, wood processing, and food processing.
The region benefits from robust infrastructure, with 11 seaports and four international airports supporting its industrial activities.
Semarang’s attractive features
Semarang, the province’s largest and most economically important city, is strategically located to facilitate imports, while labor costs are relatively lower than in Jakarta.
This makes the city an attractive destination for foreign and domestic investments. Notably, the Kendal Industrial Park (KIK), a significant joint venture with Singapore, is expected to create up to 100,000 jobs in Semarang and the surrounding area, further boosting the region’s economic development.
A recent addition to this growing investment landscape is the establishment of Beurer Indonesia Technology, a German medical device manufacturer, at the Kendal Industrial Park.
The new 8,000-square-meter facility marks the company’s expansion into Indonesia, following its operations in Hungary, China, and Moldova. The plant is projected to employ between 50 and 100 workers, potentially reaching 200 employees.
Beurer’s investment underscores the attractiveness of Indonesia, particularly Central Java, as a growing market for healthcare and wellness products. This expansion highlights Central Java’s potential to become a key player in the medical device manufacturing outsourcing industry.
Regulations on medical device manufacturing in Indonesia
Strict regulations govern medical device manufacturing in Indonesia, ensuring the safety and quality of products. Key regulations include:
- Law No. 36 of 2009 on Health, as amended by Law No. 11 of 2020 (Job Creation Law, Article 60).
Government Regulation No. 5/2021, which addresses the implementation of risk-based business licensing. - Regulation of the Ministry of Health (MoH) No. 14/2021, outlining standards for business activities and products in the health sector under the risk-based licensing framework.
- Regulation of the Ministry of Health (MoH) No. 62/2017 concerning product licensing for medical devices, in vitro diagnostic medical devices, and household health products.
Moreover, every medical device manufacturer, in vitro diagnostic medical device, and household health product manufactured, imported, assembled, or repackaged for distribution in Indonesia must obtain a Product License (registration number).
Where are the best locations in Central Java for Manufacturing?
Central Java is emerging as a hub for industrial growth, offering several well-developed industrial estates strategically located to support medical device manufacturing companies. Here’s an overview of the prominent industrial estates in the region:
- Batang Integrated Industrial Estate (KITB): The largest industrial zone in Central Java spans 3,100 hectares and has expansion plans. Strategically located along the Trans-Java Toll Road and railway, it is a National Strategic Project (PSN) set to create 282,000 jobs.
- Kendal Industrial Estate: This joint development by Sembcorp and PT Jababeka covers 1,000 hectares and has a potential expansion to 2,200 hectares. It is near Semarang City, Ahmad Yani Airport, and Tanjung Emas Port.
- Jawa Tengah Land Industrial Park (JIPS): Located at the Semarang-Demak border, this 300-hectare park focuses on sustainable operations. It has 285.75 hectares available for businesses.
- Batang Industrial Park: Spanning 287 hectares in Batang Regency, Batang Industrial Park provides quality infrastructure for economic growth and job creation.
- Terboyo Industrial Estate Semarang: A 135-hectare industrial zone in Semarang City, housing 67 companies and supporting diverse industries.
Challenges & opportunities in setting up medical device manufacturing
Indonesia’s medical device manufacturing industry has excellent growth potential, driven by a large population, rising health awareness, and government healthcare initiatives. However, the sector must navigate various challenges and opportunities to realize its prospects fully.
Major challenges
- Strict regulations: Registering and licensing medical devices in Indonesia is complex, time-consuming, and costly, delaying product launches.
- Intense competition: The market is dominated by imports, making it difficult for local companies to compete with well-resourced multinationals.
- Limited funding: Access to capital, especially for startups, is a barrier to innovation and business expansion.
- Skills gap: The sector needs more biomedical engineering and regulatory affairs experts.
- Low awareness: Many Indonesians must understand the importance of safe, high-quality medical devices, complicating marketing efforts.
Promising opportunities
- Large market: Indonesia’s 270 million population offers significant demand for medical devices.
- Growing health awareness: Rising incomes and education levels drive demand for quality healthcare products.
- Government support: Policies like reduced import duties and investment incentives benefit the local industry.
- Technological advances: Innovations create opportunities for advanced medical products and services.
Guide to Doing Business in Semarang
Simplify Your Medical Device Business Setup in Indonesia with InCorp
Unlock opportunities in Indonesia’s thriving medical device manufacturing industry with InCorp by your side. As your trusted partner, we provide end-to-end support to streamline your business journey.
Our services include:
- Company registration: Establish your business quickly and efficiently, fully complying with Indonesian regulations.
- Medical device registration: Navigate the strict regulatory requirements easily, ensuring your products are market-ready.
With our expert support, you can navigate the complexities of Indonesia’s medical device industry and focus on growing your business. Click the button below to get started.
Mauliddia Antari Nusa
Branch Manager – Semarang Office at InCorp Indonesia
Lidya provides market entry consultations for FDI in Indonesia with various perspectives in fields such as garment and textile manufacturing, furniture, farming, and engineering. In addition, Lidya has extensive experience advising expats’ stay permits in Indonesia.
