“business & investment opportunities in batam” new york & washington visit - october...

“Business & Investment Opportunities in Batam”New York & Washington Visit - October 26-27, 2004

Luncheon Meeting

Business & Investment Opportunities in Batam


Ismeth Abdullah

Chairman

Batam Industrial Development Authority

BUSINESS & INVESTMENT OPPORTUNITIES IN BATAM - INDONESIA


Strategic Location of Batam

20 kilometers

Only 20 Km away from Singapore

40 minutes ferry-ride


• Hang Nadim International Airport : • Regular Flight and Cargo Flight

• Runway : 4,000 m (longest in Indonesia)

• International Ferry Terminals:• 40 minutes from Singapore

• 120 trips daily (6am – midnight)

How to Reach Batam


Mission of Development

Transshipment

Batam

Rempang

Galang

Galang Baru

Total Area : 715 sq-km


• The growth engines in the Indonesia economy

• 100% foreign company

• Economic Growth 2003 : 7.7%

• Export-oriented manufacturing

Business Prospects


• Investment from 34 Countries- 735 Companies in Batam

- Investment Value: US$ 3.4 Billion

• 20 American Companies (US$ 59.8 million)

Foreign Investment in Batam


Development of Batam

Jan – Sept 2004• 47 new foreign companies (US$ 43.3 million)• 11 expansions existing foreign companies (US$ 117 million)


Potentials to Outsource & Trade• Electronics components

• Telecommunication

• Computer equipments

• Metal stamping

• Shipyard industry

• Metal & steel related industry

• Oil & gas supporting industry

• Rubber products

• Optical products

• Plastics & related products

• Garments


17 Industrial Estates

• Ready-built factories (rental fee around US$ 2 / sq-m per month)

• Labour Cost Competitive• Economical Utilities

Investment & Operational Costs


Workers:• Formal sector : 185,000 workers

• Non-formal sector : 75,000 workers

Development of Batam


Foreign Visitors

….attracting 1.3 million foreign visitors

last year or around 108,000 visitors

monthly…..


Sin

gap

ore

Mal

aysi

a

Bat

am

Ch

ina

Vie

tnam

Th

aila

nd

Ph

ilip

pin

e

Ind

ia

Ind

on

esia

2.28

4.62 4.875.64 5.70 5.61

6.05

7.097.52

0.00

2.00

4.00

6.00

8.00

Risk of Batam: 4.87

Grades range from zero to 10, with zero being the best grade possible and 10 the worst

Batam Risk Report


Batam China India INA Mal. Phil. Sing. Thai. Viet.

External variables 3.89 3.45 8.22 4.67 3.38 4.96 3.74 4.26 3.44

Foreign investor variables 4.06 5.88 6.51 6.93 4.20 5.16 2.26 5.46 5.16

Physical infrastructure 4.31 5.04 7.15 7.41 3.95 6.27 0.52 4.71 6.45

The ease of doing business 4.49 7.36 8.57 7.94 5.77 6.63 2.47 6.58 6.84

Domestic social environment 5.00 4.67 6.27 7.73 3.93 5.25 2.37 4.02 4.34

Quality of expatriate life 5.04 3.73 5.68 6.50 3.52 4.51 2.02 3.02 5.03

The political environment 5.49 6.58 7.81 8.49 5.53 7.05 1.63 6.45 6.36

Natural environment 5.27 7.93 8.43 9.12 4.69 8.07 2.32 7.51 6.97

Education and human resource variables 5.52 4.05 4.20 6.90 4.91 4.97 3.17 6.06 4.96

Institutional quality, accountability and standards 5.59 7.72 8.03 9.51 6.29 7.64 2.28 8.08 7.46

TOTAL SCORE 4.87 5.64 7.09 7.52 4.62 6.05 2.28 5.61 5.70

Grades range from zero to 10, with zero being the best grade possible and 10 the worst.

Overall Risk Evaluation

Batam Risk Report


Security and Safety

Working hand in hand with the

Batam Police. • Better equipped and trained

• Unemployment is kept very low

Batam has stepped up security measures in the past few years. * X-ray facilities at all entry points (domestic and international). * Technical assistance for security assessment by the USA (US TDA).


• Slim bureaucratic procedures

• One Stop Service

• Focused Scope of Work

• Professional & Qualified Human

Resource

• Special status of the island

• Land rights management

• In line with the regional autonomy

BIDA (Batam Industrial Development Authority)


Free Trade Agreement US and Singapore (Jan 2004):

• Special facilities to export to the US outlined through

the Integrated Sourcing Initiatives.

• 266 types of IT and medical related products.

Products manufactured in Batam will be more competitive.

US – Singapore FTA


Forthcoming Infrastructure Projects


BATAM : An Invitation

………Come and Visit Us in BATAM !

THANK YOU

“business & investment opportunities in batam” new york & washington visit - october...

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