Investing in Indonesia’s Special Economic Zone … in Indonesia’s Special Economic Zone (SEZ)...

© 2016 by Indonesia Investment Coordinating Board (‘BKPM’). All rights reserved

Investing in Indonesia’s Special Economic Zone (SEZ)Sei Mangkei, North SumatraAn overview of opportunities, capabilities and provisions

Version: December 2016

The Investment Coordinating Board of the Republic of Indonesia2

ContentsSpecial Economic Zone (SEZ) Sei Mangkei, North Sumatra

• North Sumatra - at a glance 3

• Connections that matter 4

• Why SEZ Sei Mangkei? 5

• Market/Project opportunities 6 - 13

• Existing and future capabilities 14 – 23

• Government provisions and support 25 - 34

• Six good reasons to invest in SEZ Sei Mangkei 36

Developed in collaboration with North Sumatra Key Authorities:• Management of SEZ Sei Mangkei, PTPN III• Regional Statistic Office (BPS Sumut)• Investment Promotion Board North Sumatra (BPMP) • Regional Development Agency (BAPEDDA)• Department of Transport, and• Department of Public Works.

3The Investment Coordinating Board of the Republic of Indonesia

North Sumatra, Indonesia at a glance

I N D O N E S I A

Indonesia’s home to :• Second largest fisheries production and exports• Largest rubber plantations• Largest certified sustainable palm oil producers• Largest vegetables and fruits producers

Area : 71,680 km2

Climate : Tropical and humid, 25°C – 36°CPopulation : 13.9 million (2015)Capital city : MedanMain airport : Kualanamu International Airport (KNO)Direct flying time from KNO to:SIN 01h15m KUL 01h00m BKK 01h55m CGK 02h25m

Seaports :• Belawan (fisheries)• Tanjung Balai (fisheries)• Kuala Tanjung (integrated terminal under construction)

Natural tourism spots:Lake Toba, Tangkahan, Gunung Leuser National Park, Sipiso-piso waterfall, Bukit Lawang, Berastagi, etc.Volcanos : Mt. Sinabung (active, 2450m)

Mt. Sibayak (2094m)

North Sumatra is one of Indonesia’s 34 provinces.

INDONESIA lies at the intersection of the Pacific

Ocean and the Indian Ocean. Over half of all international shipping

goes through Indonesia waters.

As one of the most populated countries in the

world (currently 255million people),

Indonesia accounts 40% of total ASEAN

population.

World’s 4th Longest Coastline


Connections that matter:SEZ Sei Mangkei is well-linked to international ports

Note: Special Economic Zone (SEZ) SEI MANGKEINorth Sumatra, Indonesia

Belawan seaport

KNOairport

KUALATANJUNGportSpecialEconomicZone

SEIMANGKEI

ToThailand,MiddleEast,Asia,Europe,andbeyond.

38km to Kuala Tanjung port

71.3km to Tanjung Balai port

106km to KNO Airport

125km to Medan (capital city)

146km t0 Belawan seaport

LakeToba

Medan

Tanjung Balaiseaport

FisheriesAgricultureSeatransportation

Airtransportation


MARKET / PROJECTOPPORTUNITIES

EXISTING & FUTURE CAPABILITIES

GOVERNMENT PROVISIONS & SUPPORT

§ The 2,000 ha Sei Mangkei is tucked in the largest plantations & is only 38 km to the nearest port.

§ SEZ Sei Mangkei will attract an estimated USD 5.5billion (or IDR 71.9trillion) worth of investment until 2025.

§ SEZ Sei Mangkei is geographically strategic and is well-linked to international ports

§ USD 385million (or IDR 5.4trillion) are spent on the infrastructure of the SEZ.

§ North Sumatra is Indonesia’s largest fisheries and plantations hub incl. rubber, palm oil, coffee, coconut & cocoa

§ Belawan and Tanjung Balaican potentially supply fisheries products to factories in SeiMangkei

§ One of the lowest operating costs in ASEAN-5 (Thailand, Philippines, Malaysia, Vietnam and Indonesia)

§ Over 200 Centres of Excellence

§ 100% Foreign Capital ownership - SEZ is exempt from provision of Negative Investment List

§ FDI are allowed Rights to Build within the SEZ (Up to 30 years lease)

§ A range of fiscal and non-fiscal incentives are offered to private investors; such as import duty, tax holiday, tax allowance, exemption on luxury goods VAT

§ Up to 100% tax reduction for Tourism sector

Why Sei Mangkei?


Image Source: google earth

MARKET/PROJECT OPPORTUNITIES


North Sumatrais expected to maintain steadyeconomic growth

5.75% in 2017

Investing in SEZ Sei Mangkei will have a positive impact on North Sumatra

Source: CEIC Data (2014), BPS (2014), KKP DirGen Fisheries Processing and Marketing (2014)

Investing in SEZ Sei Mangkeiwill have a positive impact on North Sumatra, in general, as not only it will absorbed local workforce but the return on investment will improve the prosperity of the region.

North Sumatra the fourth most populous province Indonesia. The region has huge potential and abundant fisheries and agriculture sources in its territory.

Indonesia’s

4thMost Populous Province .

SEZ Sei Mangkei was inaugurated by President Joko Widodo on 27 January 2015.

SEZ Sei Mangkei will attract an estimated

USD 5.5billion(or IDR 71.9trillion) worth of investment until 2025.

USD 385million(or IDR 5.4trillion) are spent on the infrastructure of the SEZ.This includes the development of Multi-purpose Terminal Kuala Tanjung port – see P.35.23%

5.10%

5.65% 5.75%

2014 2015 2016 2017


Industrial estates will encourage growth of regional employment level

Source: North Sumatra Regional Statistics Office (2015).

The role of medium–large Industrial estates in North Sumatra on local employment and value add (2013-2015)

2013 2014 2015Number of companies

(unit) 1,006.00 1,027.00 1,012.00

Number of workforce (person) 166,307.00 154,972.00 155,662.00

Added value (USD million) 6,215.22 5,820.05 5,857.59

19.86%19.97%

20.21%

2013 2014 2015

The contribution of North Sumatra processing enterprises towards regional GDP

Majority workforce (almost 37%) in North Sumatra are in full-time permanent employment with medium-large industrial enterprises. While the number of these enterprises fell by 1.46% in 2015, nonetheless they have contributed 20.21% to the regional GDP.

Processing industries will play important parts in encouraging regional employment.

18.65%

15.75%

3.05%

36.81%

8.47%

17.27%

North Sumatra Employment Status in 2015

Self-employed (individual)

Business owner with temporary workersBusiness owner with permanent workersPermanent company employmentFreelancer

Family business


10.2 10.6 11.113.4

16.2

19.5

2014 2015 2016 2017 2018 2019

Targeted Total Volume and Fish Production (million ton) 2014 – 2019

Source: RPMJN 2015 - 2019

Belawan and Tanjung Balai can potentially supply fisheries products to factories in Sei Mangkei

Source: RPJMN 2015-2019 p.178, **KKP Buku Kelautan danPerikanan (2013) and BPS (2014)

The Indonesian fisheries sector contributed almost 7% or USD 7.84 billion to the country’s economy in 2014.

Domestic fish consumption** grew to 38.0 kilograms (kg)/capita in 2014 from 35.2 kg/capita in 2013. The average monthly expenditure per capita for fish rose to IDR28,356 (or approx. USD 2.83) in 2013. This is the highest level since 2000 and an increase of 6.6% from 2012.

The Government’s Midterm Plan* is to achieve GDP growth of 7.2% annually in the fisheries sector. In order to meet its 2019 production target, Indonesia will require approximately 90 billion seeds derived from 15.8 million species.

+13,600 Fish Processing Units are already available In North Sumatra.Sumatra : 13,602Java : 26,805Kalimantan : 8,611Bali & Nusa Tenggara : 4,947Sulawesi : 4,674Maluku & Papua : 1,524

Total (2014) : 60,163

29.08 30.48 32.52 33.89 35.14

Annual Domestic Fish Consumption per capita (Kg)

2008 2009 2010 2011 2012

Both Belawanand TanjungBalai produce 1,380 ton of catches per month.


CommoditySize of

plantations(Hectare)

2015 Production

(ton)1 Rubber 396,259 333,922 2 Palm Oil 395,489 5,101,384 3 Coffee Arabica 59,815 49,085 4 Coffee Robusta 21,589 10,022 5 Coconut 85,217 89,773 6 Cocoa 67,392 43,610 7 Cloves 3,174 641 8 Incense 22,914 5,093 9 Cinnamon 5,866 4,050 10 Patchouli oil 864 242 11 Candlenut 11,372 13,367 12 Tobacco 656 601 13 Cane (sugar cane) 771 2,980 14 Nutmeg 165 51 15 Peppercorns 178 169 16 Kapok cotton 484 156 17 Gambir plant 2,073 1,938 18 Sugar Palm 5,506 3,720 19 Areca Nut 6,066 2,182 20 Vanilla 258 101 21 Cardamom 24 19

North Sumatra is Indonesia’s largest plantation hub incl. rubber, palm oil, coffee, coconut & cocoa

Source: North Sumatra Regional Statistics Office (2015); www.climatepolicyinitiative.org.

10.3413.32

17.822.5 26.12

28

40

60

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 ......... 2020 2020

Indonesia Palm Oil Annual Production Meeting World 2020 Demand (million tonnes)

Actual Indonesia production

Forecasted Indonesia production

Estimated 2020 World Consumption

Indonesia’s global market share in palm oil production is 50% in 2012. By 2020, palm oil production is estimated to reach 40 million tonnes while the world consumption will reach 60 million tonnes. North Sumatra’s palm oil accounted 13% to national production.

Sustainability and traceability approach: Together with the private sector, such as Unilever which already has Oleochemical processing plants in SeiMangkei, the Indonesian government is collaborating to deliver positive environmental impacts and improve smallholder farmer livelihoods in North Sumatra.


No. Project Description Project Scope

Total Investment

(USD Million)

Financing Scheme

NPV (USD Million) IRR (%) PBP

(Years)Project

ScheduleFeasibility

studies

1 Oleochemical Industry

To build fatty alcohol factory, capacity 300 tons destilled fatty alcohol per day.

1200 tbc 564 24,80 3,74 2017 2012

2Independent Power Producer (IPP)

To build electricity power plant based on natural gas resources, capacity 250 MW.

330

PartnershipbetweenPTPN III,

PERTAMINA, and POSCO

ENERGY (SOUTH KOREA)

212 20,75 7,00 2016 2014

3 Refinery Industry

To build refinery factory integrated with Tocotrienol (T50), capacity 600.000 tons CPO/year.

47 tbc 24 20,41 7,68 2015 2015

4 Tyre Industry

To build tyre factory (motor cycle tyre), capacity 7 million tons inner wheel/year & 14 million tons outer wheel/year.

35 tbc 4 18,81 5,87 2016 2010

5 Biodiesel Industry

To build oleochemical industry produce biodiesel, integrated with surfactant, beta carotene, tocopherol and tocotrienol capacity 300.000 tons CPO/year.

170 tbc 100 15,75 7,00 2016 2010

6 POME Biogas Power Plant

To build Biogas Power Plant based on Palm Oil Mill Effluent (POME) capacity 2,11 MW.

7,0 tbc 1,5 16,05 7,22 2016 2010

Project opportunitiesPTPN III (and BKPM) will be able to advise further on the details of investment and the feasibility studies

Source: PT. PERKEBUNAN NUSANTARA III (PERSERO)See contact details on P.26


No. Project Description Project Scope Total Investment (USD Million)

Financing Scheme

NPV (USD Million)

IRR (%)

PBP (Years)

Project Schedule

Feasibility Studies

1 Housing (89 units@200m2/ 500m2) To build housing for rent 6,06

tbc 1,19 14,44 6,25 2016 Based on FS June 2015

2 Housing (405 units @150 m2/ 300 m2) To build housing for rent 19,18

3 Infastructure in Housing Area

To build road, sewer and drains, pavement, utilities in housing area

4,61

4 Supporting Facilities in Housing Area

To build Fitness center, Restaurant, Swimming Pool, Sport center, Jogging track & playground in housing area

1,72

Opportunities in building homesPTPN III (or BKPM) will be able to advise further on the details of investment and the feasibility studies

Source: PT. PERKEBUNAN NUSANTARA III (PERSERO)See contact details on P.26


USD 385million were spent on the infrastructure development of the SEZThis includes developing a multipurpose sea terminal Kuala Tanjung port and railway tracks, which are currently underway.

WTP 250 m3/hour WWTP 250 m3/hour

Dry Port 2300 TEUs

Electricity hubs150 KV / 60 MVA

Gas pipes 75 MMSCFD

Telecommunication & IT (Fiber Optic)

Road

Railway tracks Motorways Medan – TebingTinggi

Kuala Tanjung :400.000 TEUs

Container capacity:3.5 million ton liquid


Image Source: http://marketeers.com/unilever-perkuat-investasi-lewat-pabrik-bumbu-masak/ PT Unilever Indonesia Tbk factory in Cikarang, West Java.

EXISTING &FUTURECAPABILITIES


North Sumatra’s already skilled labour could be benefitted from on the job training

Source: National Labour Force Survey (BPS) 2015

Working Population aged 15+ by Industry (%) 2015

Educational Attainment Total (%)

Agriculture, forestry, plantation, fishery, livestock 41.30

Mining and Quarrying 0.47

Manufacture 7.55

Electricity, Gas and Water Supply 0.16

Construction 6.03

Trade, Hotel and Restaurant 21.33

Transportation and Communication 5.43

Bank and Other Financial Institutions 2.27

Public Service 15.46

North Sumatra

Greater Jakarta

West Sumatra

RiauBali

60

62

64

66

68

70

72

74

76

78

80

2010 2011 2012 2013 2014 2015

Human Development Index (2010 - 2015) in selected regions in Indonesia

More than 40% North Sumatran are employed in the agriculture and fisheries sector. Whilst, 21% are in the retail and tourism businesses –suggesting that the region still relies on the traditional sectors.

Meantime, employment in the manufacturing and construction sectors only make up 13% when combined. North Sumatra will need more value-added investments, for example, those in the processing sector, in order to drive up the region’s human development index – as reflected above, still amongst the lowest.


Centres of Excellence There are over 2o0active private higher education and colleges in North Sumatra:

Source: www.forlap.dikti.go.idhttp://kabarmedan.com/ini-daftar-perguruan-tinggi-swasta-berizin-di-sumut//

Economy:• Sekolah Tinggi Ilmu Ekonomi Harapan• Sekolah Tinggi Ilmu Ekonomi IBBI• Sekolah Tinggi Ilmu Ekonomi IndonesiaMedan• Sekolah Tinggi Ilmu Ekonomi ITMIMedan• Sekolah Tinggi Ilmu Ekonomi LMII• Sekolah Tinggi Ilmu Ekonomi NusaBangsa• Sekolah Tinggi Ilmu Ekonomi ProfesionalIndonesia

• Sekolah Tinggi Ilmu Ekonomi Tricom• Sekolah Tinggi Ilmu Ekonomi AlHikmah• Sekolah Tinggi Ilmu Ekonomi Eka Prasetya• Sekolah Tinggi Ilmu Ekonomi Graha Kirana• STIEInformasi Teknologi dan Bisnis• STIEMikroskill• STIEIBMIMedan• STIEProfessionalManajemen CollegeIndonesiaLaws:• Sekolah Tinggi Ilmu Hukum AlHikmah• Sekolah Tinggi Ilmu Hukum Graha Kirana• Sekolah Tinggi Ilmu Hukum SwadayaTechnology andindustry:• Institut Sains dan Teknologi TdPardede• Institut Teknologi Medan• Akademi Teknik Elektro Medik Binalita Sudama• Akademi Teknik IndonesiaCutMeutia• Akademi Teknik Industri Immanuel• Sekolah Tinggi Teknik Harapan• Sekolah Tinggi Teknik Poliprofesi• Sekolah Tinggi Teknologi Immanuel• Sekolah Tinggi Teknologi Sinar HusniNursingAcademy:• Binalita Sudama• Columbia Asia• Darmo Medan• HelvetiaMedan• Indah• Kesdam I/BukitBarisan Medan• Malahayati Medan• RSUHerna• SariMutiara Medan• Teladan Bahagia• Wirahusada Medan

Heathcare:• Akademi Farmasi IndahDeliSerdang• Akademi Pendidikan Kesehatan Talitakum• Akademi PerekamMedik DanInfokes Imelda• Sekolah Tinggi Ilmu Kesehatan BinalitaSudama

• Sekolah Tinggi Ilmu Kesehatan Flora• Sekolah Tinggi Ilmu Kesehatan Helvetia• Sekolah Tinggi Ilmu Kesehatan RSHajiMedan• Sekolah Tinggi Ilmu Kesehatan SumateraUtara• Sekolah Tinggi Kesehatan ImeldaMedan• Sekolah Tinggi Olahraga DanKesehatan BinaGuna

• STIKESNurliana Medan• STIKESSantaElisabethMedan• STIKESSeniorMedan• STIKESSiti Hajar• STIKESWidya Husada MedanMidwiferyAcademy:• AudiHusada Medan• Bakti Inang Persada• Bina Sejaktera Ameta• BudiMulia Medan• Cipto Medan• Darmo Medan• Hafsyah Medan• Hasarma Medan• HelvetiaMedan• Indah• Mitra Husada Medan• Nusantara2000• Palapa Husada• SariHusada• SariMutiara• Sehat Medan• Sehati• YYSPendidikan Dr Rusdi MedanForeignlanguages:• Sekolah Tinggi Bahasa Asing Harapan• Sekolah Tinggi Ilmu Bahasa Asing ITMIMedan• STBAPersahabatan Internasional Asia

Accountancy, Finance&Management:• Akademi Akuntansi Profesional Indonesia• Akademi Akuntansi YPKMedan• Akademi Keuangan dan Perbankan ICMCantrika Mitra• Akademi Manajemen Informatika &KomputerUniversal

• Akademi Manajemen Informatika dan KomputerImelda

• Akademi Manajemen Informatika DanKomputer Itmi• Akademi Manajemen Informatika DanKomputer Logika• Akademi Manajemen Informatika DanKomputerMedan

• Akuntansi DanBisnis Internasional• AMIKHarapan Medan• AMIKMedanBusinessPolyteknik• AMIKPolibisnis Medan• AMIKWidya Loka Medan• S.T.Manajemen Bisnis MultiSarana Manajemen• Akademi Sekretari Manajemen Cendana• Sekolah Tinggi Ilmu Manajemen SukmaFisheries,Maritime&Tourism:• Akademi Maritim Belawan• Akademi Maritim IndonesiaMedan• Akademi Pariwisata dan Perhotelan Darma Agung• Akademi Pariwisata MedanHotelSchool• Akademi Pariwisata NusantaraMedan• Akademi Pariwisata TamanHarapan• Akademi Perniagaan dan PerusahaanAPIPSUMedan• Akademi Refraksi Optisi Binalita SudamaAgriculture:STIPERAgrobisnis Perkebunan

IT&Communications:• Akademi Informatika dan Komputer Medicom• ATROYayasan Amal Sinar BhaktiMedan• Sekolah Tinggi Ilmu Komputer Medan• Sekolah Tinggi Ilmu Komunikasi Pembangunan• STMIKBudiDarma• STMIKITMIMedan• STMIKKristenNeumannIndonesia• STMIKLogika• STMIKPelita NusantaraMedan• STMIKSisingamangaraja XII• STMIKTime• STMIKTriguna Dharma• STMIKMikroskil• STMIKIBBI

Universities:• Universitas Al-Azhar• Universitas Alwashliyah• Universitas AmirHamzah• Universitas CutNyak Dhien• Universitas Darma Agung• Universitas Dharmawangsa• Universitas DianNusantara• Universitas HKBPNommensen• Universitas IslamSumateraUtara• Universitas Katolik SantoThomas• Universitas MedanArea• Universitas MethodistIndonesia• Universitas Muhammadiyah SumateraUtara

• Universitas MuslimNusantaraAlWasliyah• Universitas Pelita Harapan Medan• Universitas PembangunanPanca Budi• Universitas Pembinaan MasyarakatIndonesia

• Universitas Potensi Utama• Universitas PrimaIndonesia• Universitas Quality• Universitas SariMutiara IndonesiaMedan• Universitas Sisingamangaraja XII• Universitas Sutomo

Politechnics:• Politeknik Ganesha• Politeknik IT&BMedan• Politeknik Kesehatan YRSUDr Rusdi• Politeknik LP3IMedan• Politeknik Mandiri Bina Prestasi• Politeknik Poliprofesi Medan• Politeknik SantoThomas• Politeknik Unggul LP3M

TheInvestmentCoordinatingBoardoftheRepublicofIndonesia17

Regional Minimum Wages

No Province 2015 Min Wage

2016 Minimum Wage growth

in IDR *US$

1 DKI Jakarta 2,700,000 3,100,000 230 14.8

2 Papua 2,193,000 2,450,770 182 11.7

3 North Sulawesi 2,150,000 2,400,000 178 11.6

4 Bangka Belitung 2,100,000 2,341,500 173 11.5

5 South Sulawesi 2,000,000 2,250,000 167 12.5

6 West Java N/A 2,250,000 167

7 West Papua 2,015,000 2,237,000 166 11.0

8 South Sumatra 1,964,346 2,206,000 163 11.7

9 Riau Islands 1,954,000 2,178,710 161 11.5

10 North Kalimantan 2,026,126 2,175,340 161 7.4

11 East Kalimantan 2,026,126 2,161,253 160 6.7

12 Aceh 1,900,000 2,118,500 157 11.5

13 Riau 1,878,000 2,095,000 155 11.5

14 South Kalimantan 1,870,000 2,085,500 154 11.5

15 Central Kalimantan 1,896,367 2,057,550 152 8.5

16 Jambi 1,710,000 1,906,650 141 11.5

17 Gorontalo 1,600,000 1,875,000 139 17.2

Pro Investment Policy

No Province 2015 Min Wage

2016 Minimum Wage growth

in IDR *US$

18 West Sulawesi 1,655,500 1,864,000 138 12.6

19 Southeast Sulawesi 1,652,000 1,850,000 137 12.0

20 North Sumatra 1,625,000 1,811,875 134 11.5

21 Bali 1,621,172 1,807,600 134 11.5

22 West Sumatra 1,615,000 1,800,725 133 11.5

23 Banten 1,600,000 1,784,000 132 11.5

24 Moluccas 1,650,000 1,775,000 131 7.6

25 Lampung 1,581,000 1,763,000 131 11.5

26 West Kalimantan 1,560,000 1,739,400 129 11.5

27 North Moluccas 1,577,617 1,681,266 125 6.6

28 Central Sulawesi 1,500,000 1,670,000 124 11.3

29 Bengkulu 1,500,000 1,605,000 119 7.0

30 West Nusa Tenggara 1,330,000 1,482,950 110 11.5

31 Yogyakarta 1,302,500 1,452,400 108 11.5

32 East Nusa Tenggara 1,250,000 1,425,000 106 14.0

33 East Java* NA 3,045,000 226

34 Central Java* NA 1,909,000 141* Eas t and Central Java provinces did not set minimum wage at the provinci al level in 2016 but did so at the district/city level. The num ber provided above are minimum wage forSurabaya as the highest minimum wage in East Java and Semarang as the highest minimum wage in Central Java.

(GovernmentRegulationNo.78of2015(PPNo.78/2015)concerningwages)

134 minimumwageUSDJakarta

NorthSumatra

USD230


Indonesia General Salary Guide

Source: Kelly Indonesia 2016 Salary Guide*Qualification = S1 (equivalent to undergraduate)

PROCUREMENT, SUPPLY CHAIN & LOGISTICS

SALARY RANGE IN IDR (PER MONTH)

QUALIFICATION EXPERIENCE (YEARS) MIN MAX

PURCHASING

Commercial Manager S1 5-8 25,000,000 35,000,000

Commercial Specialist S1 2-4 6,000,000 10,000,000

Customer Service Manager S1 5-8 20,000,000 35,000,000

Order Fulillment Manager S1 5-8 25,000,000 30,000,000

Sales & Order Management Manager S1 5-8 20,000,000 22,000,000

Logistics Manager S1 6-10 22,000,000 40,000,000

Logistics Analyst S1 3-5 12,000,000 15,000,000

Logistics Specialist S1 2-4 7,500,000 10,000,000

Supply Chain Manager S1 6-10 40,000,000 80,000,000

Demand Planner S1 2-4 7,500,000 15,000,000

Supply Planner S1 2-4 7,500,000 15,000,000

Material Planner S1 2-4 7,500,000 15,000,000

Inventory Manager S1 6-10 20,000,000 25,000,000

Procurement / Purchasing Manager / Director S1 10-12 60,000,000 90,000,000

E–procurement Manager S1 6-10 20,000,000 40,000,000

Sourcing Manager S1 6-10 25,000,000 40,000,000

Strategic Procurement Manager S1 6-10 25,000,000 50,000,000

Business processes Improvement Manager S1 6-10 25,000,000 50,000,000

Marketing Communication Executive S1 1+ 3,000,000 4,000,000

Finance Admin S1 1+ 4,000,000 5,000,000

Telesales Oficer S1 1+ 3,000,000 4,000,000


Cont… Indonesia General Salary Guide


CHEMICAL



Account Manager - Water Solution S1 7+ 25,000,000 40,000,000

Sales Development Manager S1 7+ 20,000,000 35,000,000

Key Account Manager - Microbiological Control S1 5+ 10,000,000 18,000,000

Business Development Executive - Automotive S1 3+ 10,000,000 15,000,000

Customer Service Lead S1 5+ 10,000,000 15,000,000

Technical Sales Support S1 3+ 10,000,000 15,000,000

Business Development Manager S1 10+ 30,000,000 45,000,000

Quality Assurance Oficer S1 3+ 5,000,000 7,000,000

Quality Assurance Manager S1 7+ 25,000,000 40,000,000

Distribution Manager S1 7+ 25,000,000 40,000,000

PROCUREMENT, SUPPLY CHAIN & LOGISTICS



Distribution Manager S1 6-7 25,000,000 35,000,000

Shipping Supervisor S1 4-5 6,500,000 10,000,000

Shipping Assistant S1 1-3 3,500,000 5,000,000

Operations Executive S1 2-3 4,500,000 7,000,000

Warehouse Manager S1 4-5 10,000,000 25,000,000

Warehouse Supervisor S1 3-5 10,000,000 15,000,000

Warehouse / Store Assistant S1 1-3 3,500,000 5,000,000 OPERATIONS / SHIPPING

Operations Director S1 10-15 60,000,000 90,000,000

Commercial Director S1 10-15 60,000,000 100,000,000

Shipping Manager S1 6-8 25,000,000 40,000,000

Operations Manager - Sea Freight / Ocean Freight S1 6-8 25,000,000 35,000,000

Operations Manager - Airfreight S1 6-8 25,000,000 35,000,000

Cold Hub Manager S1 6-8 25,000,000 35,000,000

CHEMICALS




ENGINEERING, PROCUREMENT & CONSTRUCTION



Business Development Manager S1 10+ 30,000,000 75,000,000

Project Manager S1 10+ 45,000,000 85,000,000

Project Engineer S1 8+ 30,000,000 50,000,000

Project Control Manager S1 10+ 30,000,000 50,000,000

Project Control Engineer S1 5-8 15,000,000 30,000,000

Cost Control Engineer S1 5-8 15,000,000 30,000,000

Contract Engineer S1 5-8 15,000,000 30,000,000

Engineering Director S1 10+ 75,000,000 125,000,000

Engineering Manager S1 10+ 50,000,000 85,000,000

Process Engineer S1 5-8 15,000,000 40,000,000

Process Safety / Loss Prevention Engineer S1 5-8 15,000,000 45,000,000

Mechanical Rotating / Static Engineer S1 5-8 15,000,000 35,000,000

Piping Engineer S1 5-8 15,000,000 35,000,000

Pipeline Engineer S1 5-8 15,000,000 40,000,000

Electrical Engineer S1 5-8 15,000,000 35,000,000

Instrumentation Engineer S1 5-8 15,000,000 35,000,000

Automation Engineer S1 5-8 10,000,000 35,000,000

Civil Engineer S1 5-8 15,000,000 35,000,000

Offshore Structural Engineer S1 5-8 15,000,000 40,000,000

Supply Chain Manager S1 10+ 30,000,000 60,000,000

Construction Manager S1 10+ 40,000,000 75,000,000

Construction Engineer S1 5-8 10,000,000 30,000,000

Fabrication Engineer S1 5-8 15,000,000 35,000,000

HVAC Engineer S1 5-8 15,000,000 35,000,000

Health Safety Environment Manager S1 10+ 25,000,000 50,000,000

Health Safety Environment Engineer S1 5-8 10,000,000 25,000,000

Quality Control Manager S1 10+ 25,000,000 50,000,000

Quality Control Engineer S1 5-8 10,000,000 25,000,000




ENGINEERING & TECHNICAL (MANUFACTURING)



Engineering Director S1 10+ 70,000,000 100,000,000

Engineering Manager S1 10+ 35,000,000 70,000,000

Project Manager S1 5-8 35,000,000 80,000,000

Construction Manager S1 7-10 30,000,000 70,000,000

Program Manager S1 5-8 30,000,000 40,000,000

Planning Manager S1 5-8 25,000,000 35,000,000

Production Manager S1 7-10 25,000,000 35,000,000

Maintenance & Reliability Manager S1 7-10 25,000,000 45,000,000

Material Manager S1 5-8 25,000,000 35,000,000

Senior Design Engineer - Automation S1 5-7 12,000,000 20,000,000

Planner S1 3-5 7,500,000 12,000,000

Process Engineer S1 3-5 7,500,000 12,000,000

Production Engineer S1 3-5 7,500,000 15,000,000

Project Engineer S1 3-5 10,000,000 25,000,000

Quality Assurance Engineer S1 3-5 7,500,000 15,000,000

Development Engineer S1 3-5 7,500,000 15,000,000

Electrical Design Engineer S1 3-5 7,500,000 15,000,000

Electrical Engineer S1 3-5 7,500,000 15,000,000

Mechanical Design Engineer S1 3-5 7,500,000 15,000,000

Service Manager S1 10+ 30,000,000 50,000,000


Data from the Financial Times has found that Indonesia has the lowest operating costs for a typical Food & Beverages Manufacturing plant* of all the 5 key ASEAN markets, at just over US$1.51m per annum.

Indonesia is therefore 39% lower than the average of US$2.47m per annumacross the 5 ASEAN countries.

Out of these markets, Indonesia has the 2nd lowest labour costs and the 3rd lowest utility costs – it the only market with relatively low costs on both the labour and utility fronts.

Total annual operating costs:e.g. Food & Beverages Manufacturing Plant*

Source: fDi Benchmark (Financial Times)* Based on a food and beverage manufacturing plant with a headcount of 200, comprised as follows: 186 production operatives (16 highly skilled, 70 skilled and 100 unskilled); 6 quality control specialists, 3 secretaries; 2 office service specialists; 1 head of manufacturing; 1 production manager and 1 quality control manager.

Indonesia has the lowest operating costs for a typical manufacturing plant


No. Investors Investment activities Ha1 PT Unilever Oleochemical Indonesia Oleochemical Industries 27.282 PT PLN (Persero) Main Electricity Plant 150 KV, 60 MVA 14.203 PT Pertamina Gas Meterred Gas Station 1.004 Ministry of Industry Innovation Hub building 1.025 PTPN III (Persero) Palm Oil Mill 13.406 PTPN III (Persero) Palm Kernel Oil Mill 3.267 PTPN III (Persero) PLTBm 2 x 3,5 MW 5.008 PTPN III (Persero) Offices 6.409 PTPN III (Persero) Employees Housing 45.0110 PTPN III (Persero) Road development: ROW 43 4.0911 PTPN III (Persero) Road development:ROW 28 3.3612 PTPN III (Persero) Sewers and drains 6.4513 Ministry of Industry (PMN) Tank Farm 9.0314 Ministry of Industry (PMN) Dry Port 15.0015 Ministry of Industry (PMN) Rail tracks 6.0016 Ministry of Industry (PMN) Road ROW 62 22.00

17 PT. Industri Nabati Lestari (PTPN III & PTPN IV)

Refinery Plant 600.000 MTPY 7.50

18PTPN III (Persero), PT Pertamina (Persero), dan International Partner (Posco Energy) (Planned investment)

Gas Power Plant Independent Power Purchaser

250 MW20.00

19PTPN III (Persero), PT Pertamina (Persero), dan PT. Sumberdaya Sewatama (Planned investment)

Biogas Power PlantCapaicity: 2.11 MW 2.00

Invested area of land (Ha) 212.00

Existing investors – The corporate landscape

Source: PTPNIII presentation and investor direct testimony

“We are benefitted from our engagement with PTPN III. SeiMangkei offers not only the proximity to plentiful sustainable Palm Oil supply, but Unilever wants an opportunity to impact the lives of small-holder farmers.”

PT. Unilever Oleochemical Indonesia (UOI)

“The new Kuala Tanjung port will have a big impact for UOI in terms of logistics.”

On the new Kuala Tanjungport:

On Sei Mangkei:

What are the current investors saying?


Success story:

Unilever is the first investor to be establsihed in SEZ Sei Mangkei. The operation was formally inaugurated in November 2015.

Unilever chose Sei Mangkei due to its proximity to plentiful sustainable Palm Oil supply, and the opportunity to impact the lives of small-holder farmers. Unilver is benefitted from direct engagement with PTPN III. What’s more, fiscal incentives and promised infrastructure development will help support the sustainability of the business.

Unilever aims to be a profitable USD 1Billion player in the sustainable Oleo-Chemical industry by 2020, and at the same time, impacting the lives of local small farmers.

Investor PT. Unilever OleochemicalIndonesia (UOI)

Type of investment Oleochemical (85% export)

Investment Value USD 175million

Factory capacity 200 ton/year

Absorbed workforce 403 people


Image source:

GOVERNMENT PROVISIONS AND SUPPORT


Coordinating Ministry for Economic Affairs

National Council for Special Economic Zones was established through Presidential Decree No. 8 of 2010to support the development of Indonesia SEZ. http://kek.ekon.go.id

Provincial Government of North Sumatra

(Propinsi Sumatera Utara) Responsible in the administration of 25 regencies and 8 autonomous cities in the province of North Sumatra.

www.sumutprov.go.id

Regency Government of Simalungun

(Kabupaten Simalungun)Responsible in the administration of SEZ SeiMangkei which is located in the Simalungun regency (Regulation of SimalungunRegency No.4 / 2014)

www.simalungunkab.go.id

PT Perkebunan Nusantara III (Persero) or ‘PTPN III’A state-own companyspecialising in the plantation, processing and marketing of plantations in the regency of Simalungun.The company owns, manages and promotes SEZ Sei Mangkei.

www.ptpn3.co.id

APINDO (AsosiasiPengusaha Indonesia/ Indonesia Employers

AssociationRecognised in 1975 by Decree of the Minister of Manpower, and mandated by KADIN to represent the Employers on issuer related to industrial relations and manpower affairs. http://apindo.or.id/en

Indonesia Chambers of Commerce and Industry / Kamar Dagang Indonesia

(KADIN)

KADIN is focused on all matters relating to trade, industry and services, offering a strategic forum for Indonesian entrepreneurs. It is privately financed, hence an independent spokesperson of private sector interests.

www.kadin-indonesia.or.id

Investment Promotion Board North Sumatra

(BPMP) As part of the Provincial Government of North Sumatra administration and BKPM, the board promotes inward investment within the region, and is based in Medan.

www.sumutprov.go.id

Regional Development Agency North Sumatra

(BAPPEDA Sumut)As part of the Provincial Government of North Sumatra administration and BAPPENAS, the agency dealswith the regional development, and is based in Medan.

http://bappeda.sumutprov.go.id

Key Government Authorities and AssociationsSEZ Sei Mangkei


SEZ Key RegulationsBKPM together with the management of PTPN III can provide you with further details on specific pieces of regulation.

Source: http://kek.ekon.go.id/mengapa-indonesia/peratur an-perundangan/

No. Law/ Regulation: Concerning

1 Law No. 39 Year 2009 Special Econonim Zones (SEZs)

2 Government Regulation No. 96 Year 2015 SEZ fiscal and non-fiscal incentives

3 President Decree No. 8 Year 2010 National Council of SEZs

4 Government Regulation No. 33 Year 2010 National Council & Dewan Kawasan

5 Government Regulation No. 2 Year 2011Amended to: Government Regulation No. 100 Tahun 2012

Implementation of SEZ(Amendment to Government Regulationno.2 Tahun 2011)

6 Government Regulation No. 29 Year 2012 Stipulation of SEZ Sei Mangkei

7 Regional Regulation of Simalungun Regency No.10 Year 2012

Spatial Planning of Simalungun 2011-2031

8 Head of Regency Decree of Simalungun Regency No.188.45/193/Bppd Year 2012

Stipulation of PTPN III as Developer and Manager of SEZ Sei Mangkei

9 President Decree No. 3 andPresident Instruction No.1 Year 2016

Accelerating the Implementation of the National Strategic Projects

10 Regulation of the Ministry of Manpower (to be enacted by end of 2016) - TBC

Recruitment of foreign employees within SEZ


SEZ Sei Mangkei Master Plan: investors are allowed Rights to Build and Manage*

Source: PT. PERKEBUNAN NUSANTARA III (PERSERO)*Certificate No. 1 Dated 16 July 2014

1

2

3

4

5

6

7

8

9

18

10

11

12

13

14

15

1616

15

17

18

1717

17

17

17

No. Designated zone: Size(Ha)

1 Palm oil processing 245.49

2 Various industries 579.50

3 Pesticides and fertilisers 85.06

4 Rubber processing 84.10

5 Electronics manufacturing 155.40

6 Commercial area 31.91

7 Offices 42.57

8 Logistics and warehousing 67.67

9 Public facilities (hospitals, schools, training centres) 24.50

10 Residential area 11.80

11 Tourism-related 117.50

12 Electricity plants 38.32

13 Factory Building 19.40

14 Small-Medium Business 16.30

15 Wastewater treatment Plant 13.24

16 Water Treatment Plant 10.90

17 Road development: ROW/Utilities 185.10

18 Greeneries/Parks 205.04

Total (Ha) 1,933.80


TAX ALLOWANCE

TAX HOLIDAY

VATON LUXURY GOODS

30% reduction of corporate net income tax for 6 years(Accelerated depreciation)

For investment > IDR 1 Trillionreduction in income tax 20 – 100% for 10 - 25 years.

Exemption on Value added Tax and Luxury Goods Tax

Tax on dividends of 10%:5-10 years compensation for losses

For investment > IDR 500 Billionreduction in income tax 20 – 100% for 5- 15 years.

Exemption on transaction fees especially goods transferedfrom/to SEZ and within the designated customs area

SEZ Fiscal incentivesBased on: Government Regulation No. 96 Year 2015

*Terms and conditions applySource: https://www.ekon.go.id/berita/print /paket-kebijakan-ekonomi-vi.1799.html

IMPORT DUTY FACILITY

FOREIGN OWNERSHIPPROPERTY

TOURISMSPECIFIC INVESTMENT

From SEZ to domestic markets:Import tariff is based on provisions in the Certificate of Origin.

100% foreign ownership in properties within SEZ, including housing.

50 – 100% reduction in TouristDevelopment Tax

Residential status is guaranteed by the official management of SEZ

Exemption for Value added Tax and Luxury Goods Tax

50 – 100% reduction in Entertainment Tax


EMPLOYMENT IMMIGRATION• Special Tripartite Wages Council has been

established for SEZ• Each company only has one Labour Union

Forum• Ratification and extension of Manpower

Utilisation Plan will be dealt with directly at the SEZ

• Extension of permit to utilise foreign workers will be dealt with directly at the SEZ.

• A 30-day Visa on Arrival facility can be extended up to 5 times

• Multiple-entry visitors visa is valid for 1 year• Residence permits for foreigners who own

property in SEZ• Residence permits for foreign senior or

elderly living in the Tourism SEZ

SEZ Non-Fiscal incentivesBased on: Government Regulation No. 96 Year 2015

*Terms and conditions applySource: https://www.ekon.go.id/berita/print /paket-kebijakan-ekonomi-vi.1799.html

LAND OWNERSHIP INVESTMENT LICENSES• Rights to Build to be awarded to private

enterprises along with the necessary extension

• The SEZ Administrator provides services in land within SEZ

• SEZ Administrator is responsible for issuing licenses and permits through the principle of one stop service at the SEZs

• Accelerating the issuance of licenses no later than 3 hours

• Implementation of licensing compliance requirements

• Processing and the completion of licenses (immigration, labour and land) is carried out by the SEZ Administrator


How to apply?

Source: PTPN III booklet

1. Submit Letter of Interest (see example on the right)

a. Type of investment and activitiesb. Required size of land (m2 / ha)c. Utilities

2. Agreement and approvala. Negotiationb. Processing Deed of Establishment

incl. submission of land compensation

3. Payment of Land Compensation Cost

a. Land Clearing and Land Elevation by Elevasi PTPN III.

b. Processing Rights To Build (Hak Guna Bangunan) certificate by Investor via the Administrator of SEZ Sei Mangkei.

Example of Letter of Intent:


Where to apply?Investment licenses can be directly obtained through applying at the SEZ Sei Mangkei

Official SEZ Management:

Head office (Medan):Jl. Sei Batanghari No. 2 Medan 20122 - IndonesiaTelephone (+62-61) 8452244, 8453100Fax. (+62-61) 8455177, 8454728

Representative office (Jakarta)Jl. Proklamasi No. 25Menteng, Jakarta Pusat – Indonesia

Project Office :Kawasan Industri Sei Mangkei (KISMK) Kecamatan Bosar Maligas, KabupatenSimalungun

Contact Person: Ms Yenni SimangunsongPhone (+62-622) 96627Emails : [email protected]

[email protected]

www.ptpn3.co.id www.seimangkeisez.

com

PT Perkebunan Nusantara III (Persero) or ‘PTPN III’

SEZ Administrator and Management:To accelerate business process and investment activities, SEZ SeiMangkei is supported by a dedicated One Stop Service administrator located in the same office asPTPN III as the SEZ SeiMangkei management.


Getting to SEZ Sei Mangkei:The SEZ is currently only reachable by car / on the road

Image: courtesy of The EU DESK at BKPMNote: Based on a site visit to the SEZ

From:KNO airport: 2.5 hoursMedan central: 3.5 hoursKuala Tanjung port: 40 minutes

38km to Kuala Tanjung port

71.3km to Tanjung Balai port

106km to KNO Airport

125km to Medan (capital city)

146km t0 Belawan seaport

Belawan seaport

KNOairport

KUALATANJUNGportSpecialEconomicZone

SEIMANGKEI

LakeToba

Medan

Tanjung Balaiseaport


Issuance of Investment Principle License at SEZ SeiMangkei is restricted to certain activities:Some technical licenses are not issued directly at the SEZ Sei Mangkei, and therefore pre-consultations with BKPM is essential.

Based on BKPM Chairman Regulation No. 1 Year 2014 Concerning The Issuance of Principle License at SEZ Sei Mangkei.

Manufacturing /production of:

• Alcoholic Beverages

• Valuable paper• Weapons and

Ammunition• Toxic and

Hazardous Materials

• Strategically high-tech industries

• High priority Industries.

Energy and Mineral Resources:

• Upstream Oil and Gas

Trading:

• Import License Number for Oil & Gas, Energy and Mineral Resources.

• Direct selling business license.

Banking and Finance products

OPEN 100% for FDI

SEZ Sei Mangkeiexempt from provisions of Investment that is

Open with Conditions stipulated through the Negative Investment

List*

President Regulation No. 44/2016 Regarding Investment that is Closed and Open with

Conditions.


Source: http://www.kemendag.go.id/i d/photo/2014/05/02/peninjauan-kesiapan-kek-sei-mangkei-sumut

6 GOOD REASONS TO INVEST IN SEZ SEI MANGKEI


The 2,000 ha Sei Mangkei is tucked in the largest plantations & is only 38 km to the nearest port.

Source: PT Perkebunan Nusantara III (Persero) presentation on SEZ Sei Mangkei, September 2016.*After West Java, East Java, and Central Java **HPL (Hak Pengelolaan or Rights to Build and Manage), Land Certificate No. 1 Dated16 July2014

100% Foreign Capital

Ownership

Special Regulation

Government of Indonesia Regulation No. 29 of 2009

on SEZSei Mangkei

Land managed by Indonesia state-owned

company P.T. Perkebunan

Nusantara III

Special Economic Zone SEI MANGKEI

SEZ is exempt from provision

of Negative Investment List

(President Regulation No. 44/2016)

RIGHTS TO BUILD &

MANAGE**Foreign companies are entitled to

construct and own buildings or other structures on the land.

Max. 30 years (extendable for another 20 years)

N O R T H S U M A T R AIndonesia 4th most populous province*

IDR650,000/sqm(US$50/sqm)

Competitive 30year

land lease tariff

Investin...

For further information, contact us at:

© 2016 by Indonesia Investment Coordinating Board (‘BKPM’). All rights reserved

This presentation has been developed with the support of:The European Union (EU) Desk at BKPM, part of EU-Indonesia Trade Cooperation Facility (TCF) projects.

BKPM international representative offices (Investment Promotion Centre):

BKPM - Indonesia Investment Coordinating BoardJln. Jend. Gatot Subroto No. 44Jakarta 12190 - Indonesiat. +62 21 525 2008f. +62 21 525 4945e. [email protected]

The EU Desk at BKPMt. +62 21 527 4802 e. [email protected]

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