Indonesia’s industrial sector closed 2025 with strong momentum as industrial estates expanded in scale, investment value, and economic impact. The Ministry of Industry recorded steady growth in industrial estate development, while industry stakeholders highlighted the structural reforms needed to sustain performance in 2026. Together, these trends position industrial estates as a central pillar of Indonesia’s manufacturing and investment strategy amid shifting global supply chains.
Indonesia Industrial Estates Expand Nationwide
Indonesia’s industrial estates reached a total of 175 locations by the end of 2025, reflecting continued progress in industrial zone development across the country. Around 59.4 percent of these estates operate on Java, while the remaining locations support industrial expansion beyond the island. Over the past year, nine new industrial estates entered operation, including four outside Java, reinforcing the government’s push for more balanced regional development.
Director General of Industrial Resilience, Regional Development, and International Industrial Access at the Ministry of Industry, Tri Supondy, confirmed the expansion during the ministry’s year-end briefing. “Over the past year, nine new industrial estates have been added, four of which are located outside Java.” he said, as reported by RM.id. This expansion also increased the national industrial estate land area by 4.32 percent, or 4,079.53 hectares, strengthening capacity for future industrial activity.
Industrial Estate Investment Drives Economic Growth
The expansion of industrial estates translated directly into stronger industrial estate investment performance. Realized investment rose by 9.26 percent compared with the previous year, signaling sustained investor confidence in Indonesia’s industrial ecosystem. At the same time, job absorption within industrial estates increased by 15 percent, underlining their role as a major employment generator.
Industrial estates also made a measurable contribution to national output. According to the Ministry of Industry, industrial estate activity supported a 9.44 percent contribution to Gross Domestic Product in the third quarter of 2025. In addition, the number of tenants operating within industrial estates grew by 1.12 percent, reflecting steady demand from manufacturing and logistics companies seeking integrated industrial locations.
Investor Interest Strengthens Key Industrial Corridors
Foreign investor interest remained strong throughout 2025, driven by demand in high-growth sectors. Investors from Japan, Singapore, China, South Korea, Russia, and Eastern Europe showed increasing interest in battery and electric vehicle manufacturing, modern logistics, renewable energy, data centers, and high-technology manufacturing.
Several industrial corridors emerged as focal points for investment activity. These included the Batam–Bintan–Karimun corridor in the Riau Islands, West Java’s Bekasi–Karawang–Purwakarta–Subang belt, as well as key locations in Central Java and East Java. Improved infrastructure readiness and stronger government support helped position these regions as competitive industrial destinations within Southeast Asia.
Industrial Infrastructure Challenges Persist into 2026
Despite the positive performance, industrial estate operators continue to face structural constraints. Spatial planning remains one of the most pressing challenges. Many industrial estates, including National Strategic Projects, still experience delays in obtaining Spatial Utilization Approval and Spatial Utilization Conformity Confirmation, even though regulations mandate faster processing.
Addressing this issue, Indonesian Industrial Estates Association Chairman Akhmad Ma’ruf Maulana stated, “Spatial planning is the lifeblood of industrial estates. As long as basic permits are not synchronized, investment acceleration will always be held back. This must become a cross-ministerial priority for resolution in 2026.”
Utilities and basic infrastructure also require attention. Electricity availability and subsidized natural gas supplies have yet to fully align with rising industrial demand. In several locations, limited logistics access continues to increase production costs and reduce distribution efficiency, creating challenges for manufacturers operating within industrial estates.
Digital and Green Industrial Estate Development Advances
At the same time, 2025 marked a critical phase in the transformation of industrial estates toward digitalization and sustainability. Estate operators adopted digital estate systems, applied artificial intelligence for estate monitoring, and integrated licensing processes through the OSS-RBA platform. These measures improved governance efficiency and strengthened competitiveness in an increasingly technology-driven industrial environment.
Industry stakeholders also expanded cross-ministerial coordination and international partnerships. Cooperation initiatives with partners from Japan, China, Russia, and Singapore aimed to integrate Indonesian industrial estates more deeply into global supply chains that continue to evolve rapidly.
Outlook: Industrial Estate Growth and 2026 Prospects
Looking ahead, stakeholders expressed measured optimism for 2026. Global supply chain shifts and industrial relocation from East Asia present significant opportunities for Indonesia. However, future gains depend on resolving spatial planning, utility, and infrastructure constraints.
Summing up the outlook, Akhmad Ma’ruf Maulana said, “If spatial planning and utility issues can be resolved, 2026 could become a year of accelerated investment. Industrial estates have the potential to become the main engine of economic growth toward the 8 percent target.” With continued reform and coordination, industrial estates are poised to remain a driving force in Indonesia’s economic strategy.
Source: rm.id, mediaindonesia.com
Image: Harviyan Perdana Putra / ANTARA FOTO
