By Sonia Adriaty, Industrial Park
Indonesia, home to the world’s largest Muslim population—approximately 87.2% of its 281 million citizens in 2024—holds a strategic position in the global islamic economy. Over the past two decades, Muslim consumers have become increasingly conscious of halal standards, driving significant growth across multiple sectors of the Islamic economy. According to the State of the Global Islamic Economy (SGIE) Report 2024/2025, global halal product consumption has surpassed USD 2.4 trillion and is projected to expand further in the coming years.
Indonesia is well positioned to capture a larger share of this growing market, particularly through exports to key destinations such as Organization of Islamic Cooperation (OIC) member states, the Middle East and North Africa (MENA), South Asia, and Southeast Asia. In 2024 alone, Indonesia’s halal product exports reached USD 64.11 billion (approximately IDR 1,080 trillion), reinforcing its role as a pillar of the Islamic economy.
Beyond exports, Indonesia aspires to become a global hub for the halal industry, leveraging its strategic geographic location along major international trade routes. A critical initiative in this regard is the development of Halal Industrial Parks (HIP)—dedicated industrial estates designed to support the halal supply chain, from raw material processing and production to certification and distribution.
Several HIPs are already emerging across Indonesia, including Modern Halal Valley in Banten and Safe n Lock in Sidoarjo. However, their development still faces challenges such as infrastructure gaps, limited halal sector investment, and cross-sector regulatory integration.
Building an Integrated Halal Ecosystem
Every country has its own approach to building global competitiveness. For Indonesia, home to the world’s largest Muslim population, this advantage lies in the halal economy. However, becoming a global hub for the halal industry is not merely about producing goods with a halal label—it requires an integrated, clean, and certified ecosystem. This is where Halal Industrial Parks (KIH) play a vital role.
Under Ministry of Industry Regulation No. 17/2020, HIPs are defined as industrial parks equipped with governance and facilities to ensure that production, storage, and distribution all adhere to halal standards. These include halal laboratories, internal audit systems, halal product assurance mechanisms, and segregated logistics from non-halal goods.
In practice, HIPs function as comprehensive ecosystems. Raw materials enter through halal-certified logistics channels; production facilities undergo regular audits to avoid contamination; workers receive ongoing halal training; and “one-stop halal services” streamline certification and compliance processes. This approach enhances consumer trust while reducing operational risks for industry players.
Policy and Regulatory Framework
Several regulations provide the foundation for HIP development:
- Law No. 33/2014 on Halal Product Assurance– Mandates phased halal certification, creating strong demand for halal production zones.
- Government Regulation No. 39/2021 on the Implementation of Halal Product Assurance – Strengthens the role of HIPs within the national halal value chain.
- Ministry of Industry Regulation No. 17/2020 – Establishes official guidelines for the designation and development of HIPs.
HIPs are also positioned within the Masterplan for Indonesia’s Islamic Economy (Masterplan Ekonomi Syariah Indonesia or MEKSI) 2019–2024, launched by President Joko Widodo in 2019. Drafted by the National Committee for Sharia Economics and Finance (KNEKS), the masterplan seeks to position Indonesia as a global leader in the Islamic economy. Within this framework, HIPs serve as catalysts to strengthen the halal value chain, particularly in strategic sectors such as halal food and beverages, pharmaceuticals, cosmetics, and modest fashion.
HIP is not merely a production site; it is a fully integrated ecosystem that embeds halal principles across the entire value chain. Imagine an industrial zone where raw materials enter through halal-certified logistics channels, every production facility undergoes regular audits to prevent contamination, workers receive continuous halal training, and one-stop halal services are available on-site. This integrated approach enables HIHs to address one of the core challenges of the halal industry—safeguarding integrity and consumer trust.
In 2019, President Joko Widodo launched the Masterplan for Indonesia’s Islamic Economy (Masterplan Ekonomi Syariah Indonesia or MEKSI) 2019–2024 to unlock Indonesia’s vast but underutilized Islamic economic potential. Drafted by the National Committee for Sharia Economics and Finance (Komite Nasional Ekonomi dan Keuangan Syariah or KNEKS), aims to position Indonesia as a leading global hub for the Islamic economy.
One of the critical issues hindering the halal industry’s growth in Indonesia has been the lack of infrastructure capable of ensuring end-to-end halal compliance—from raw materials and production to distribution. To address this, MEKSI 2019–2024 places the development of HIPs as a key catalyst for strengthening the halal value chain, particularly in strategic sectors such as halal food and beverages, cosmetics, pharmaceuticals, and modest fashion.
HIPs are explicitly identified within the Halal Value Chain Strengthening Strategy, as one of the masterplan’s core pillars. Building on earlier efforts under MEKSI 2015–2019, the development of HIHs was intended to:
- Enhance competitiveness of Indonesian halal products in both domestic and export markets;
- Safeguard halal integrity by providing contamination-free ecosystems in line with the Halal Assurance System;
- Improve efficiency in costs and logistics for halal businesses, particularly SMEs; and
- Streamline certification and compliance, with facilities integrated with supporting institutions such as BPJPH, LPH, halal laboratories, and training centers.
Flagship Halal Industrial Parks
As part of Indonesia’s ambition to become a global halal industry hub, HIP development remains a central strategy within MEKSI’s first pillar—strengthening the halal value chain. Several HIPs have already been initiated, designated, or are under development during the 2019–2024 period, these are:
1. Modern Halal Valley, Bintan, Riau Islands
Officially designated in 2020 as Indonesia’s first HIP by the Ministry of Industry. Developed on a large and strategically located area, where the park is designed to accommodate large-scale halal industries. Situated within a Free Trade Zone with direct export access to Singapore and Malaysia, Bintan is positioned as Indonesia’s gateway for halal exports to global markets. Its facilities include halal certification laboratories, dedicated halal logistics channels, and contamination-free production zones from other non-halal products to ensure compliance with international halal standards.
2. Safe n Lock Halal Industrial Park, Sidoarjo, East Java
Safe n Lock serves as a hub for SMEs engaged in the halal sector. Conceived as a “one-stop halal ecosystem,” it integrates production, storage, and certification processes in a single location, making it easier for smaller businesses to participate in the halal economy. Beyond infrastructure, the park provides training, incubation, and mentoring programs that help SMEs move up the value chain. This model demonstrates that the halal industry is not solely the domain of large corporations; instead, SMEs are recognized as key drivers of growth. The park is further supported by integrated halal certification services, streamlining compliance processes with Halal Product Assurance Organizing Body. (Badan Penyelenggara Jaminan Produk Halal or BPJPH) and MUI (Majelis Ulama Indonesia).
3. Modern Cikande Industrial Estate, Serang, Banten
This park has been developed with the ambition of becoming a major halal export hub targeting the Middle East and African markets. Covering more than 3,000 hectares and equipped with world-class industrial facilities, Cikande accommodates halal production lines across food, beverages, cosmetics, and pharmaceuticals. Its strengths lie in its strategic location, comprehensive facilities, and focus on integrated halal supply chains, while also incorporating innovations in environmentally sustainable industrial development that adhere to high international standards.
These parks demonstrate Indonesia’s intent to evolve from being a major consumer of halal products into a leading global producer.
Challenges and Opportunities
Key Challenges:
The development of Halal Industrial Parks (HIP) is a strategic initiative for Indonesia to strengthen its position in the global halal value chain. Yet, the rollout of HIPs is not without structural, technical, and social challenges, which require coordinated and sustained action. The key issues include:
- Limited Infrastructure and Park Readiness
Not all industrial parks positioned as HIPs are fully prepared to meet halal standards. Gaps remain in contamination-free production facilities between halal and non-halal products, dedicated halal logistics systems, and integrated halal laboratories and certification centers in one ecosystem. Several parks are retrofitting existing infrastructure rather than being designed from the outset as halal parks, leading to costly and inefficient adjustments.
- Low Literacy and Capacity Among Industry Players
Many businesses—particularly SMEs—still lack sufficient understanding of halal assurance systems, certification costs, and the principle of segregation in raw materials, equipment, and production spaces for halal products. This creates the perception that entering an HIP is bureaucratic, complex, and costly, even though the model is intended to deliver long-term efficiency and reliability.
- Regulatory Overlap and Weak Institutional Coordination
Alignment between central and local government agencies remains weak, particularly in governance, audit schedules, and certification processes. This misalignment risks delaying the operational readiness and scaling of HIPs.
- Suboptimal Financing and Investment Incentives
HIP development requires significant capital investment in infrastructure, human resources, digital systems, and halal laboratories. However, financing options from both public and private sectors remain limited. In addition, fiscal incentives and tax breaks specific to halal investors are still underutilized, reducing the overall attractiveness of HIPs to investors.
- Weak Domestic Market Linkages and Supply Chain Integration
Many halal producers remain dependent on imported raw materials, as domestic linkages among halal industry players are not yet strong. This is a missed opportunity given the robust domestic demand for halal products. The halal ecosystem is still in a formative stage and has yet to achieve full integration across suppliers, manufacturers, logistics providers, and markets.
- Shortage of Skilled Workforce and Supporting Technology
Indonesia continues to face a shortage of certified halal auditors, food technologists specializing in halal production, and qualified halal laboratory technicians. This talent gap slows certification processes and results in uneven implementation across regions.
Emerging Opportunities:
However, these challenges should be viewed as starting points rather than obstacles. Behind them lie opportunities that, if leveraged, can be converted into long-term competitive advantages. Key opportunities include:
- First-Mover Advantage in Integrated Halal Industry
With only a limited number of companies currently operating within HIPs, early entrants stand to gain a first-mover position. This brings stronger market trust, enhanced branding as pioneers of the halal industry, and preferential access to government incentives.
- Expanding Domestic and Global Markets
Demand for halal products continues to grow—driven not only by Muslim consumers but also by broader perceptions of halal as a standard for quality, cleanliness, and ethical production. Indonesia remains a net importer of halal goods, presenting opportunities to substitute imports. Beyond the domestic market, significant export potential exists in the Middle East, South Asia, North Africa, as well as in Europe, Japan, and Korea, where halal-focused consumer segments are growing.
- Innovation and Halal Technology Development
The current gap in halal-related technology opens space for innovation. Industry players can develop halal traceability applications, advanced testing and labeling technologies, and dedicated halal e-commerce platforms.
Outlook
Although still at an early stage, Indonesia’s Halal Industrial Parks offer significant potential to shape the country’s role in the global halal economy. With effective infrastructure development, regulatory alignment, and investment support, HIPs can strengthen Indonesia’s halal value chain and establish the country as both a major producer and exporter of halal products.
Source
- Komite Nasional Ekonomi dan Keuangan Syariah (KNEKS). (2019). Masterplan Ekonomi Syariah Indonesia 2019–2024. Jakarta: KNEKS. https://kneks.go.id/storage/upload/1568167097-Masterplan%20Ekonomi%20Syariah%20Indonesia%202019-2024.pdf
- Kementerian Perindustrian Republik Indonesia. (2020). Peraturan Menteri Perindustrian No. 17 Tahun 2020 tentang Tata Cara Penetapan Kawasan Industri Halal. https://peraturan.bpk.go.id/Home/Details/158926/permenperin-no-17-tahun-2020
- DinarStandard. (2024). State of the Global Islamic Economy Report 2024/2025. Dubai: DinarStandard & Salaam Gateway.
- Neraca.co.id. (2024). Ekspor Produk Halal Nasional Tembus US$64,11 Miliar Sepanjang 2024. Diakses dari:https://www.neraca.co.id
- Kementerian Perindustrian RI. (2021–2024). Artikel dan berita resmi terkait penetapan KIH.
- https://kemenperin.go.id/artikel/22681/Bintan-Resmi-Jadi-Kawasan-Industri-Halal-Pertama-di-Indonesia
- https://kemenperin.go.id/artikel/22663/Safe-n-Lock-Sidoarjo-Jadi-Kawasan-Industri-Halal
- Halal Expo Indonesia. (2023). Cikande Industrial Estate, Kawasan Industri Halal.
https://halalexpo.co.id/cikande-industrial-estate-kawasan-industri-halal
