Future in the Golden Triangle

Workers of PT Harapan Global Apparel buy meals from sellers around the factory during the break in Sukaraja Wetan village, Jatiwangi district, Majalengka regency, West Java, Monday (11/2/2019). In the past five years, the textile industry and textile products have targeted Majalengka. Apart from Kertajati West Java International Airport, labor costs in Majalengka are also cheaper than Bandung, Bekasi and Karawang.MAJALENGKA, KOMPAS — Three regions in West Java that are planned for developing into a golden triangle have the potential to become a major hub for the textile industry. Major pull factors are infrastructure, both existing and planned, as well as competitive minimum wages.

These regions are Majalengka regency, with its West Java International Airport (BIJB), Subang regency, with its planned development of Patimbang Port, and Cirebon regency, with its planned development of a 10,000-hectare industrial area.

The three regions have relatively competitive minimum wages ranging from Rp 1.79 million (US$127.50) to Rp 2.73 million. Their excellent potential is hoped to prevent the textile and textile products (TPT) industry from relocating from West Java to neighboring Central Java.

Data at the Indonesian Employers Association’s (Apindo) West Java chapter shows that five garment companies have relocated to Central Java: Libra Permana from Bogor regency, Sugintex from Bekasi municipality, Sahabat Unggul Internasional from Bogor municipality, Lucky Abadi from Depok municipality and Dream Sentosa from Karawang regency.

“West Java’s economic future lies in the golden triangle. We are discussing the spatial plans and designs this semester. We are proposing that the area be designated a special economic zone [SEZ],” West Java Governor Ridwan Kamil said in Cirebon. An SEZ status would allow for automatic allocation in the state budget and the region would experience faster development and licensing.

Of these three regions, Majalengka is deemed to be the most ready. The local administration has prepared a special TPT industry cluster.

KOMPAS/ABDULLAH FIKRI ASHRI

The construction of PT LYG Garment Indonesia\'s garment factory in Gunungsari village, Kasokandel district, Majalengka regency, West Java, Monday (11/2/2019). In the past five years, the textile industry and textile products have targeted Majalengka. Apart from Kertajati West Java International Airport, labor costs in Majalengka are also cheaper than Bandung, Bekasi and Karawang.

The Majalengka Investment and One-Stop Integrated Service Agency’s (DPMPTSP) 2017 data shows that the cluster occupies 125 hectares in Kertajati district. It is located around 7 kilometers from the BIJB, is surrounded by a 3,480-hectare aerocity and is accessible through the Cikopo-Palimanan toll road’s Kertajati exit.

Next year, the BIJB will be connected to the CIleunyi-Sumedang-Dawuan (Cisumdawu) toll road and to Subang’s Patimbang Port by rail.

With its planned capacity of 7.5 million 20-foot equivalent units (TEUs), Patimban Port will reduce the burden on Jakarta’s Tanjung Priok Port. Planned for completion in 2027, around 50 percent of port activities will be moved from Tanjung Priok to Patimban.

Industrial estate

The Majalengka administration is also allocating 321 hectares in Palasah district to develop an industrial estate, around 8 kilometers from its administrative center, as stipulated in Regency Regulation No.

11/2011 on spatial planning. The regulation covers the development of 12,500 hectares into industrial estates for industries includingTPT, agricultural, chemical, metal, engineering, transportation and telematics.

“Majalengka is ready to welcome TPT companies that are relocating,” said Majalengka DPMPTSP investment development head Ridwan M. Ramdhani.

The regency is currently home to 10 TPT factories in Sumberjaya, Kasokandel, Dawuan and Jatiwangi districts. These factories have absorbed 21,000 regional workers from Majalengka as well as Cirebon and Sumedang.

PT LYG Garment Indonesia, for instance, built its 14,686-square-meter factory in May 2018 in Gunungsari village, Kasokandel. Several other factories are increasing their capacities, such as PT Leetex Garment Indonesia’s 13,655-square-meter factory in Dawuan. Established in 2010, Leetex added a warehouse and dormitories in July 2017.

“In the future, the TPT industry is expected to expand even more. We have readied an industrial area. Investors will have no trouble finding locations,” said Ridwan.

Future home

Apindo West Java head Deddy Wijaya said that the golden triangle was suitable for becoming the future home of TPT companies in West Java. Production costs would be reduced once the transportation infrastructure was complete.

“Land is cheaper there. Business owners can purchase only one hectare in Karawang, Bekasi or Bandung, or four hectares in eastern West Java [for the same amount of money],” he said.

Another pull factor is the regional minimum wages of Rp 1.79 million in Majalengka and Rp 2.73 million in Subang. This was more competitive than the minimum wages in Karawang and Bekasi regencies or Bekasi municipality of above Rp 4 million. The minimum wage in Majalengka is even lower than in Semarang municipality and regency or Jepara regency in Central Java, to where many textile businesses are relocating their factories.

Indonesian Textile Association (API) West Java head Jusak Sulaiman emphasized the readiness of infrastructure and manpower in the golden triangle. Apart from land, water supply and waste management system, a supply of skilled labor must also be available. “The main challenge is to provide skilled labor. In Majalengka, for instance, most of the manpower is in the agriculture sector,” he said.

Indonesian Chamber of Commerce (Kadin) deputy chair of regional economic development Sanny Iskandar said in Jakarta on Monday that businesspeople in labor-intensive industries considered many factors before investing in or relocating their factories. The minimum wage in different regions was among these factors.

“Another factor is the seriousness and competence of regional heads in developing investment for the local manufacturing industry,” he said, referring to ease of licensing, security and developing supporting infrastructure.

Other attractive regions were Subang, Garut, Majalengka, Indramayu and Cirebon in West Java, Sayung, Demak, Boyolali and Kendal in Central Java, and Malang and its surrounding areas in East Java.

Kadin deputy chair of manpower and industrial relations Anton J. Supit said the government must be serious in realizing the importance of labor-intensive industries. The next step was to improve the investment climate, including legal certainty, technical policies and labor issues. “Hopefully there will be manpower reform, including a revision to Law No. 13/2003 on Manpower,” he said.

(SEM/IKI/TAM/RTG/CAS)