February 27, 2025 | 10:05 pm
TEMPO.CO, Jakarta - The head of the Kendal special economic zone (SEZ), Tjertja Karja Adil, said the U.S.-China trade war has brought a blessing to the domestic industry. He said many Chinese companies relocate their factories to Kendal after Trump assumed office.
"We are blessed. Not long after Trump came into power, foreign investors visited my office and said, ‘Sir, we are ready to relocate our factories from China to Kendal,’” said Tjertja during a media briefing at Menara Batavia, Central Jakarta, on Thursday, February 27, 2025.
The factory relocation, he said, enables Chinese products to enter the U.S. market with a ‘Made in Indonesia’ label. “Since factories in China are subjected to high tariffs, they can't sell their products there (U.S.)," Tjertja added.
Another contributing factor to such relocations is government incentives offered to Chinese companies, including the tax holiday. This policy allows for tax exemptions for up to 20 years, depending on the investment value.
"With a minimum investment of Rp100 billion, they can receive a 10-year tax holiday," he said. Meanwhile, an investment of Rp500 billion receives a tax holiday for 15 years, and Rp1 trillion amounts to 20 years.
To date, as many as 124 corporate entities have set up shop in Kendal SEZ, with the three largest industrial sectors including fashion at 29 percent, automotive and renewable energy at 19 percent, and electronics at 17 percent.
About 39 percent of them come from China, while 26 percent are domestic companies. The rest are made up of foreign investors from Hong Kong, South Korea, and Germany.
The Kendal SEZ recorded that Kendal Industrial Park also has attracted Rp141.7 trillion worth of investments over an 8-year period. The Executive Director of KIK, Juliani Kusumaningrum, revealed that the realized investment value is Rp86.5 trillion, with a realization value of Rp42.7 trillion in 2024.
Over the past 8 years, the Kendal Industrial Park has cumulatively absorbed 61,984 workers. In 2024, 17,635 people were employed in the industrial area. "The absorbed labor consists of both direct and indirect workers," said Juliani.
Direct workers, she explained, are those directly employed by the companies in the area, while indirect workers consist of contractors and vendors involved in the construction and operation of KIK.
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