Why Invest In Batam?
As at the end of December 2002, Batam has accumulated a total of approximately US$ 9.46 billion in investment comprising of US$ 2.14 billion (22.62%) of government investment and US$ 7.320 billion (77.38%) of private investment. Government investments are in terms of infrastructure development. Private investment comprises further of 50,55% or US$ 3.70 billion of domestic investment and 49,95% or US$ 3,62 billion of foreign investment. More than 611 foreign companies are operating in Batam while the number of local companies is nearly 9,886.
Industries facilities are abundantly available. Investors can choose whether to plug into a commercially ready-to-use factory building with complete infrastructure and facilities or to acquire a lot to custom-build its factory. Erecting a 1,000 sq.-m factor building on 2,000 sq.-m lot would cost on around US$ 400,000, including the cost of acquiring land. There are 17 (seventeen) industrial estates offering their facilities ranging from ready-to-build lot parcels to building with complete facilities. Some industrial estates also offer a complete package which includes the processing of permits and licenses to relevant authorities and recruitment of labor. Housing for labor in dormitories is also provided within the industrial estate.
There are approximately 533,521 people living in Batam, coming from all over the Indonesia archipelago with 172,709 people employed in the formal sector, and 75,000 more in the informal sector. This labor is increasingly bettered skilled as they have years of training and experience. This skilled labor can be sourced directly in Batam, without the need of recruiting from other regions, such as Java and Sumatra. Half of the populations in Batam are workers, making a very healthy dependency ration.
Foreign investment application is processed with a one-stop policy in Batam and takes not more than 20 days to get approval. All permits and licenses required to start development are also processed “under one root” by the Batam Industrial Development Authority with streamlined procedures. Companies are allowed to have 100% foreign ownership. Staying permit for foreigners working in Batam is easy to obtain from the local Immigration Office. Foreign visitors to Batam will be given Visa on Arrival for most nationalities. Foreign nationals are allowed to buy and own houses, whether or not they work in Batam. So, Batam could become a second home for foreigners.
All of these things reflect the commitment of Indonesian government to fully support the development of Batam. Private sector involvement with strong support by the government is among the ingredients to have successful development.
Advantages In Batam
Besides having a strategic location, space availability, labor supply, and government support, Batam has the advantage of having well-developed, modern infrastructures.
More than 1,079.5 km of paved roads and highways are there to link all centers of activities. These roads are continuously being improved with the addition of lanes to anticipate the rapid growth of traffic. Traffic jams are nowhere to be seen even at peak periods. There are three locations of seaport to serve cargo vessels and six locations of passenger ferry terminals around the island to minimize travel times to destinations with more than 100 trips daily serving Singapore and Malaysia. The biggest seaport in Kabil has a berthing capacity of 35,000 DWT (Dead Weight Ton) and is being improved to accommodate ships to 150,000 DWT. In its ultimate phase, it will have a total wharf length of 5.5 km with an 18 meter draft.
The Hang Nadim International Airport has 4,000-m runway, the longest in Indonesia, to serve wide body passenger and cargo aircraft with 10 flights daily to Jakarta, and 155 flights weekly to other major cities in Indonesia. The terminal building has a total floor area of 31,500 sq-m and will gradually be expanded to its ultimate design of 88,000 sq.-m.
Telecommunication facilities are also of the highest standard with state-of-the-art technology which has used only 75% of the available capacity. One does not feel isolated in Batam since communications to all parts of the world is only one button away. Electricity is supplied by PLN, the stated-owned electric company, and additional power is also supplied by private power plants.
Fresh water is abundantly available from six man-made water reservoirs builds around the island with the total capacity of 3,960 liters/second. Supply of clean water is sufficient to support a population of 800,000 people and industry and has conformed to the standards of the World Health Organization and currently runs at a capacity of 1,760 liters of clean water per second.