Jababeka plans expansion as demand surges
Linda Yulisman. The Jakarta Post, Jakarta - 24/06/2011
Indonesia’s major industrial estate developer PT Jababeka Tbk., which operates the Jababeka industrial estate in Cikarang, West Java, will acquire more land to further expand in order to meet the surging demand for industrial sites.
Corporate secretary Muljadi Suganda said Thursday that his company had allocated Rp 299 billion (US$34.68 million) or 46.5 percent of the company’s capital expenditures of Rp 643 billion this year for land acquisition.
“We are upbeat that the rise in demand in the industrial site industry last year will continue this year and next year due to the more conducive business climate in the country,” he said after a shareholders meeting Thursday in Jakarta.
The firm expects to sell more than 100 hectares of industrial space this year, reaching the level it recorded before the economic crisis in 2007, Muljadi said. But, he declined to provide exact figures.
Last year, Jababeka sold 107.3 hectares of industrial space, a nearly 600 percent jump from only 15.3 hectares in 2009. Total sales were valued at Rp 712.35 billion in 2010, a 305 percent rise from a year earlier.
Vice president director Budianto Liman said that up to May his firm had sold about 36 hectares.
“The demand will possibly be higher in the last quarter this year, as was the case last year,” he said.
Budianto said the majority of buyers were foreign investors from primary investment destinations like Japan, Korea, Malaysia and Europe.
“They are expanding their businesses, especially in cars, consumer goods, electronics and pharmaceuticals.
Budianto said that besides acquiring land, his company also allocated its expenditures to develop key infrastructure: a power plant and dry port.
“We have allocated around $30 million to finish the power plant project and another $10 million to expand our dry port,” he said.
The firm reportedly started developing a 130-megawatt combined cycle power plant in 2008 in Cikarang with an estimated investment of $141 million, 75 percent of which was financed by loans from a syndicate of seven banks led by CIMB Niaga.
The power plant is expected to be completed at the end of this year with electricity to be sold to state electricity firm PT PLN with a possible buyback in line with tenant demands, Budianto said.
In 2009, it commenced construction of a dry port on a 200-hectare area in Cikarang designed to handle up to 2 million twenty-foot equivalent unit (TEUs) containers until 2020.
It already developed a 10-hectare area last year and expects to finish another 8-hectare area this year with a total investment of $20 million, Budianto said.
Improved economic fundamentals in Indonesia in recent years have attracted more global investors pouring into Southeast Asia’s largest economy.
Last year, investments jumped by 54 percent to Rp 208.5 trillion from Rp 135.26 trillion in 2009. This year, the government aims to realize Rp 240 trillion in investments, up 15 percent from 2010.
BKPM data shows that the total realized investments in the first quarter this year rose by
27.3 percent to Rp 53.6 trillion from Rp 42.1 trillion in the same period in 2010.