Overview
Quoting from Colliers’ latest published reports, the positive trend in the industrial sector continues to unfold, achieving new peaks in performance. By mid-2024, total land sales had already surpassed the total for the entire previous year. The automotive sector, now more advanced and environmentally friendly, has sparked significant transactions, akin to those of the past, surpassing the data centre sector, which has dominated industrial land absorption over the past four years. Although distinct, both the automotive and data centre sectors demonstrate that technology has significantly invaded industrial property. Investors are keen on data centre in urban areas with established infrastructure. However, a significant challenge remains: the availability of high- capacity electricity networks. While demand for urban data centres is strong, meeting the electricity requirements is a critical obstacle.
With the proliferation of high-tech industrial sectors, industrial park developers are expected to be prepared to adapt to this trend in order to remain competitive amid the emergence of new industrial zones, particularly in the eastern regions of the Greater Jakarta area, where growth is most rapid. Industrial parks that support current trends, as well as those that focus on environmental concerns such as effective waste management, energy efficiency and environmental preservation efforts, will be increasingly favoured by companies with sustainability policies.
Industrial land sales in East Java are expected to benefit from increased direct investment in the manufacturing sector. There are also positive prospects from industrial park players following the smooth one-round election, as the successful election has not only provided a positive boost to the entire Indonesian market but offers significant opportunities and clarity for business.
In the modern warehouse sector, Colliers observed a maturing e-commerce industry shifting towards traditional warehouses with lower rents, believing that manufacturing companies will become the primary drivers of demand in the warehouse market in the future, especially as the manufacturing sector continues to expand in the Greater Surabaya area.
Latest Update
- Pupuk Indonesia Collaborates with Itochu Corporation & Toyo Engineering
- PT Pupuk Indonesia will develop the world’s first hybrid green ammonia project. The development of this project is carried out in collaboration with two Japanese corporations, namely ITOCHU Corporation (ITOCHU) and Toyo Engineering Corporation (TOYO).
- This strategic cooperation was marked by the signing of a joint development agreement entitled Green Ammonia Initiative from Aceh (Project GAIA), at the 2nd Asia Zero Emission Community (AZEC) Ministerial Meeting held in Jakarta, on August 21 2024.
- The objective of Project GAIA is to produce green ammonia at Pupuk Iskandar Muda’s (PIM) PIM-2 fertilizer plant located in the Arun Lhokseumawe SEZ.
- PIM has two urea and ammonia fertilizer manufacturing units, namely the PIM-1 and PIM-2 plants. PIM-1 plant has an Ammonia production capacity of 330,000 tons per year and Urea of 570,000 tons per year, while PIM-2 has Ammonia production capacity of 396,000 tons per year and Urea 570,000 tons per year.
- In Project GAIA, Pupuk Indonesia will produce green ammonia whose process technology would be designed and built by TOYO. This green ammonia will then be supplied to ITOCHU as a raw material for marine fuel, thus forming a comprehensive value chain, as well as being the first in Indonesia and the world.
- The initial phase of development, the GAIA Front End Engineering Design Project, will begin in August At the same time, Pupuk Indonesia, ITOCHU, and TOYO will form a joint venture company, with a final investment decision expected in the first half of 2025, and commercial operations targeted for 2027.
- Still in the same series of events, Pupuk Kujang, subsidiary of Pupuk Indonesia also signed an MoU with PLN Indonesia Power and IHI Corporation regarding cooperation in green ammonia studies exploration and the implementation of ammonia co-firing.
- Indramayu’s Very First Industrial Park
- Indramayu Regency has prepared six Industrial Designated Areas (Kawasan Peruntukan Industri or KPI) with a total area of 14,000 Ha.
- Of the six areas – Patrol, Losarang, Balongan, Krangkeng, Gantar, and Terisi, Losarang finally became the first area picked by investors, namely PT Wiratama Indramayu Perkasa as the The groundbreaking of the 1,000 Ha Losarang Industrial Park was held on August 17, 2024, with initial development of 300 Ha and 3-year construction target, projecting 100,000 labor absorption.
- It was reported that there are 8-9 industrial tenants ready to build their factories, from the textile, shoe, packing cup, logistics, and suitcase / bag industries, mostly from
- The Regent of Indramayu conveyed her full support and commitment to intensively marketing this new Industrial Park as it can create jobs for the locals who have been working overseas due to the lack of job opportunities in the area.
- Pertamina Collaborates with Hyundai for Green Hydrogen
- Pertamina agreed to cooperate with Hyundai Motor Asia Pacific to develop a Hydrogen ecosystem in Indonesia.
- Sunny Kim, President of Hyundai Motor Asia Pacific Headquarters, representing Hyundai Motor Company, stated that this partnership aims to advance the use of hydrogen in Indonesia’s transportation sector.
- Pertamina has mapped 17 locations of hydrogen supply sources spread from Sumatra to Papua. From the upstream, currently Pertamina is developing a green hydrogen pilot project in the Ulubelu geothermal area with a production target of 100 kilograms per day.
- On the downstream, Pertamina is building a pilot project for a Hydrogen Fueling Station (SPBH) in Daan Mogot, West Jakarta, which will be the very first integrated energy refueling station in Indonesia.
- 20 Industrial Parks Around the Globe Aims for Decarbonization
- The industrial sector is not immune to decarbonization efforts to curb the release of greenhouse gas (GHG) emissions that cause global warming.
- Until early 2024, there are 20 Industrial Parks globally targeting for Net Zero Emission (NZE) spread across 11 countries, including 2 Industrial Park originating from Indonesia. The 20 industrial clusters are networked under the Transitioning Industrial Clusters, initiative of the World Economic Forum in collaboration with Accenture and EPRI
- The 20 Industrial Parks pledged to improve their governance models and reduce their carbon footprint to reduce emissions by 626 million tons of carbon dioxide equivalent, collectively.
- Towards transitioning Industrial Clusters, three stages of planning, developing, and scaling will be elaborated through 4 strategic technologies, from systemic efficiency and circularity; direct electrification and renewable heat; carbon capture, utilization, and storage; and hydrogen.
- The 20 Industrial Parks are:
- National Capital Hydrogen Center, USA
- Ohio Clean Hydrogen Hub Alliance, USA
- H2Houston Hub, USA
- Louisiana Future Energy Cluster, USA
- Greater St Louis and Illinois Regional Clean Hydrogen Hub Industrial Cluster, USA
- Canary Island Industrial Cluster, Spain
- Andalusian Green Hydrogen Valley, Spain
- Net-Zero Basque Industrial Super Cluster, Spain
- DKarbonation, France
- Port of Antwerp-Bruges, Belgium
- HyNet North West, England
- Zero Carbon Humber, England
- Brightlands Circular Space, Netherlands
- Sanjiang New Area Industrial Park, China
- Tianjin Economic-Technological Development Area, China
- Ordos Envision Net-Zero Industrial Park, China
- Kawasaki Carbon Neutral Industrial Complex, Japan
- Indo-Pacific Net-Zero Battery-Materials Consortium, Indonesia
- Jababeka Net-Zero Industrial Cluster, Indonesia
- Western Trade Coast, Australia
- Indo-Pacific Net-Zero Battery Materials Consortium is a joint project of Indonesian Bakrie & Brothers, Envision Group, dan Glencore plc. Envision Group is a green technology company and net-zero technology partner, designs, sells and operates smart wind turbines, energy storage systems and green hydrogen solutions through
- Envision Energy; IoT-powered batteries through Envision AESC; and the world’s largest IoT operating system through Envision Digital. Meanwhile, Glencore plc is a Swiss mining commodity company focused on copper, zinc, aluminium, nickel and cobalt. This consortium will build a nickel-based industrial park in Sulawesi with an investment of US$ 9 billion. There has been no progress on the plan since it was announced in early 2023.
- Jababeka has declared its commitment to become a Net Zero Industrial Cluster 2050 on the B20 agenda in Bali in 2022 and since early 2023 has been inviting tenants to join its Jababeka Net Zero Forum to find joint solutions in carrying out at the Labuan Steam Power Plant, in Banten, West Java.
- PGN Secured More Gas Supply
- State-owned gas provider, PGN has signed a Gas Sales and Purchase Agreement (PJBG) contract with two Cooperation Contractors, namely Pertamina EP Cepu for gas supply from the Cepu Block (Its territory includes Blora Regency in Central Java, Tuban and Bojonegoro Regencies in East Java) and PJBG Amendment with Saka Energi Muriah Ltd for gas supply from the Muriah Block (Central Java).
- The signing is to increase the supply for the rising of demand, especially in providing gas supply to their clients in Central and East Java which currently reaches 160,000 clients varying from households, small customers, commercial, industrial and
- Furthermore, with the PJBG from the Cepu Block, PGN will continue the management of the Lamongan household gas network , which previously received gas supply from Madura Offshore, to be channeled from Jambaran Tiung Biru (JTB). The amount of gas volume distributed is 0.2 million standard cubic feet per day (MMSCFD) until 2029 or until the end of JTB Field natural gas production.
- In the meantime, through the PJBG amendment from the Muriah Block, PGN obtained an agreement to increase the contract volume by 5,000 BBTU from Kepodang Field, Muriah Working Area. Thus, the total contract amount reaches 19,000 BBTU.
- PLN Cooperates with GD Power to Build Solar Panel in Karangkates, Malang
- PT PLN is collaborating with Hong Kong-based energy company GD Power Overseas Investment Company Limited (GD Power) to develop the Karangkates Floating Solar Power Plant (PLTS) in East Java, with a capacity of 129 Megawatt peak (MWp). This collaboration was marked by the signing of a letter of intent (LoI) between PLN and PLN Nusantara Renewables and GD Power in Jakarta.
- The PLTS Karangkates is projected to be able to produce up to 219 Gigawatt hour (GWh) of clean electricity to supply electricity needs in Java, especially in East Java.
- Upon operation, PLTS Karangkates will provide many benefits for the electricity sector in Indonesia, including increasing renewable energy capacity and reducing carbon emissions by 180 thousand tons of CO2 per year.
- On Running Cloud (OC) Builds Factory in West Java
- Swiss famous shoes, On Running Cloud or OC, will build their factory on a 9.4 Ha of land in Kertajati International Industrial Estate Majalengka (KIEM) on August 23,
- The company, PT Home Well Indonesia expects the factory to be operational by 2025, with a total production capacity reaching 10 million per year. Chiang Meng Wei, Director of PT Home Well Indonesia states that KIEM is a great location to build factories due to its complete supporting infrastructure around the area.
- KIEM has a total area of 400 Ha, that is being developed into 2 phases of 100 Ha and 300 Ha. The Industrial Park is dedicated to the food processing sector, shoe, steel, concrete, and open for other manufacturing sectors.
- Director of PT Dwipapuri Abadi (as KIEM’s developer) Tony Sukadil, mentioned since its official opening of the Industrial Park, KIEM has managed to attract 7 investors that will approximately occupy 23 to 25 Ha of land in the phase 1 development, secured IDR 400 billion from land sales.
- Japanese Company Commits to 1,000 EV Charging Station
- Japanese Electric Vehicle Charging Station provider, Terra Charge will install more than 1,000 charging stations in major Indonesian cities by the end of 2025, hoping to become the largest provider in Indonesia.
- Terra Charge has built more than 8,000 charging stations in Japan and targeting ambitious expansion to Indonesia.
- Entering Indonesia in 2023, the company in cooperation with PLN has mapped out more than 100 Its aggressive approach has positioned the company as one of the three largest charging station providers in Indonesia with stations spread across Jakarta, Bandung, Surabaya, and Bali.
- SUNTECH Collaborates with Kawasan Industri Terpadu Batang (KITB)
- SUNTECH, a solar panel manufacturer, with a global capacity of 25 gigawatts (GW), has committed to building a 2 GW solar panel manufacturing plant in Indonesia, and is inviting companies in its supply chain to invest in Indonesia to increase its Domestic Component Level (TKDN).
- Solar panel industry needs to be supported by strengthening the supply chain of solar cell technology, which includes the production of raw materials such as polysilicon, ingots, and wafers, as well as other components, including low iron tempered glass.
- The signing of the cooperation between SUNTECH Indonesia and the companies in its supply chain with KITB was carried out by SUNTECH Chairman Wu Fei during a panel discussion titled Road to ISF 2024: The Future of Energy Value Chains in the Regional Low-Carbon Economy Development on August 20,2024, in Jakarta.
- This signing was appreciated by various stakeholders from government bodies to associations. SUNTECH’s investment and its supply chain will be a strategy to accelerate the development of the domestic solar panel manufacturing This
- will create upstream to downstream added value in the energy transition, making the cost more affordable, and increase Indonesia’s overall competitiveness.
- Japan-Indo Asia Zero Emission Center
- Asia Zero Emission Community (AZEC) is an initiative to promote decarbonization mainly in Asia. The initiator was Japan at COP 26 in Glasgow, Scotland in 2021. AZEC’s 1st meeting was then held on March 2023 in Tokyo, with 11 partner countries that joined the initiative, namely Indonesia, Japan, Australia, Brunei Darussalam, Cambodia, Lao PDR, Malaysia, Philippines, Thailand, Vietnam, Singapore.
- The 2nd AZEC was held on August 21, 2024 in The meeting produced a shortlist of 78 projects in Asian countries that will be supported by financing from Japan, JBIC. Indonesia itself has the largest shortlist, over 34 projects.
- By the end of the meeting, Japan has signed an MoU of 70 projects across Asia, with at least 21 Indonesian projects, achieved MoU with Japanese counterparts.
- For 14 projects, Japan’s Minister of Economy, Trade and Industry has made available IDR 15.6 trillion (US$1 billion) to provide new financial support through projects partnering with the South Asian countries’ support schemes. The projects detail are not specified.
- Some of the known projects include PT Pupuk Indonesia’s collaboration with Itochu and TOYA for hybrid Green Hydrogen; Indonesia’s Ministry of Energy and Mineral Resources MoU with Japan’s New Energy and Industrial Technology Development Organization (NEDO) for a feasibility study for clean energy development in Indonesia, such as hydrogen and bioenergy; Pertamina’s MoU with Nippon Export and Insurance (NEXI) for cooperation in trade insurance and credit facilities; Japanese donation of US$ 25 million for a blue ammonia plant in Aceh; MoU between Pupuk Kujang, PLN Indonesia Power and IHI Corporation for a study on the use of green ammonia in the co-firing process at the Labuan Steam Power Plant, in Banten, West Java.
- Russia’s Interest in Nuclear Collaboration with Indonesia
- PT ThorCon Power Indonesia has officially delivered the proposal for the implementation of TMSR500 as a potential Nuclear Power Plants to the National Energy Council, with a commitment to building the first nuclear power plant with a capacity of 2×250 MW (First-of-a-Kind/FOAK) without using state budget funds.
- ThorCon Power is also targeting an electricity selling price of less than $6.9 cents per kWh with a COD in 2030 on Kelasa Island, Bangka Belitung, in alignment with the government’s target of building a Nuclear Power Plant by 2032.
- Hearing this, Russian ambassador for Indonesia, Sergei Tolchenov actively states the Russian government is ready to cooperate with Indonesia in developing nuclear as an energy The potential collaboration with Russia has been going on for a while, where in June, it was seen that the Coordinating Minister for Economic Affairs Airlangga Hartarto had also discussed the cooperation with ROSATOM during a visit to Moscow.
- ROSATOM is a state atomic energy company owned by the Russian Government that has a strategy to develop low-carbon generation, including wind The company
- has all nuclear fuel cycle technologies, from uranium mining to nuclear facilities to be offered to Indonesia.
- PGN Supply Natural Gas To Xinyi Solar
- PGN, has announced a new agreement to supply 18 billion British Thermal Units per Day (BBTUD) of natural gas to solar panel glass manufacturer PT Xinyi Solar Indonesia (XSI) in Gresik, East Java on August PGN and XSI have formalized their partnership through a Supplier Integrity Agreement and a Natural Gas Sales and Purchase Agreement (PJBG).
- Under the PJBG, PGN and XSI have agreed on a contract to deliver 18 BBTUD of natural gas over the specified period, no details were provided.
- XSI, based in the Gresik Special Economic Zone (JIIPE), is a prominent global manufacturer of glass headquartered in Hongkong.
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