Aspiring to Be a Next-Generation Industrial Park by Combining Indonesia’s Strengths with Digital Technology
COVID-19 wreaked havoc on the global economy, causing massive issues for countries around the world, and Indonesia, the core of the ASEAN economy, was no exception. Since the spring of 2020, the MM2100 Industrial Town in eastern Jakarta, where approximately 180 Japanese and other companies have set up operations, has been hit by repeated waves of cases, not only among local employees but also among Japanese staff stationed there.
“Our ties with the local community came to life,” says Keisuke Tanaka, a Marubeni employee who has been stationed at P.T. Megalopolis Manunggal Industrial Development (which sells space in, manages, and operates the park) since spring 2019, of the COVID-19 pandemic—a massive, unexpected ordeal for all. Most of the pandemic-era measures taken by MM2100, such as obtaining vaccine doses through independent channels, organizing vaccination clinics for tenants, and collaborating with local hospitals, were actually based on relationships built over the year leading up to the outbreak. In addition to implementing COVID-19 prevention measures, Tanaka also made efforts to assist the tenants in obtaining necessary visas by collaborating with the Indonesian Ministry of Industry, which enabled the tenants to continue normal operations even during the pandemic.
Meanwhile, in nearby countries like Vietnam and Thailand, the situation was entirely different: production and exports were thrown into chaos after cities were placed on lockdown. In these places, factories were only allowed to operate under the “bubble” system, in which everyone who worked there—local employees and locally stationed Japanese staff alike—had to stay within factory grounds for several months, causing all there significant discomfort and inconvenience. In stark contrast to these circumstances was the fortunate continuation of normal operations at MM2100.
Today, COVID-19 is but one in a series of challenging circumstances, such as U.S.-China tensions and Russia’s invasion of Ukraine, disrupting the global supply chain. In ASEAN and China, where Japanese manufacturing has been concentrated for half a century since the 1970s, a shift in industrial location has begun to take place once again. “There are signs of increased factory exits and expansions in MM2100 as well,” observes Tanaka. While there is naturally still much interest in capturing domestic demand from Indonesia’s population of 270 million, there is also growing interest in the country from export-oriented manufacturing companies, which have their eyes on the abundant labor force, especially the technical personnel.
One prime potential location for these companies is, of course, within MM2100, which lies along the Jakarta-Cikampek Toll Road. Lined with other large industrial parks occupied by Japanese companies, the road is known for heavy traffic, which used to be one of the weakest points of MM2100’s location. Now, however, the issue has been alleviated by the opening of an elevated expressway above the road in 2019, and construction is also underway on a parallel expressway to the south and a ring highway to Tanjung Priok, a key port for exports. These improvements in transportation infrastructure will undoubtedly further enhance MM2100’s locational value.
In the meantime, staff at MM2100 are not simply waiting around for these locational improvements to be completed. Tanaka and his colleagues at P.T. Megalopolis Manunggal Industrial Development are hard at work on implementing “smart” and “digital” transformations of industrial parks. One recent initiative in pursuit of these transformations was introducing an app for tenants to make invoices paperless, thereby contributing to operational efficiency.
MM2100 can also address another major concern for Japanese companies expanding overseas: energy securement and costs. Tanaka mentions with pride that, thanks to the advantages of Indonesia’s rich natural resources, “MM2100 is able to provide the most competitive energy supply system among industrial parks in Asia.”
Amidst a time of great change in the global supply chain, MM2100’s transformation into a “next-generation industrial park” continues apace!
All information contained in this article is based on interviews conducted in July 2022.
