Joint Operation and Development

New Capital City

PALU SEZ

New Growth Corridor

of Greater Priority
Area for Investment, ALKI 2
Industry & Logistics
between Palu SEZ-
Sulawesi &
Indonesia’s New
Capital City
INDONESIA’S NEW CAPITAL & PALU SEZ AS NEW
GROWTH CORRIDOR (future concept of greater
megapolitan priority area)
 Future significant growth of the eastern part of
Indonesia through the building of New Capital City in
a line to boost and accelarte the industrialization at
Palu SEZ of Central Sulawesi

The North Penajam Regency and Kutai Kartanegara Regency in East

Kalimantan was confirmed as the new capital due to numerous
favourable attributes.

East Kalimantan is located in the geographical centre of Indonesia and

has major supporting infrastructure which is already available. But still
needs massive infrastructure and facility developments.

54 per cent of Indonesia's more than 260 million people reside on Java
and 58 per cent of the country's gross domestic product is produced on
the island.

By contrast, the eastern part of Indonesia — which includes Kalimantan,

Sulawesi, Maluku and Papua, and covers 64 per cent of the nation’s total
area — contributes only 16.8 per cent of GDP.

The government needs to distribute more new centres of growth and

economic opportunities, chiefly to eastern Indonesia. The closest area
of the greater MPA (megapolitan priority area) and the
industrial/manufacturing SEZ who has abundant natural sources and
strategic deep sea port is Palu SEZ of Central Sulawesi.
 15
Indonesia
SEZ's

2020
 Indonesia Special
Economic Zone (SEZ)

The basic concept of The areas are designed to The areas are given certain facilities and
Indonesia SEZ is the maximize industrial incentives in order to increase the
preparation of areas which activities, export, import competitiveness among the countries nearby.
have accessibility to the and other related Both the increasing competitiveness and the
global market (access to the activities which has high incentives are expected to be the pull factors
deep sea port and or airport. to attract investors to the region.
economic value.

It is strenghtening the The SEZs are expected to

framework of a unitary improve Indonesia’s The SEZs development will increase
state of Indonesia through value-added and value outer island competitiveness as an
alleviating uneven chain through down- investment destination, through
regional development. streaming regional infrastructure development
industrialization.
 ü New center of growth in Sulawesi
Central Sulawesi & Palu and support growth of eastern
SEZ - Hub for North- Indonesia
ü Industrial complex for local
South Trading Corridor commodity down streams industry
and new industry cluster.

ü Palu is situated in the Indonesian

ALKI-2, it is North – South corridor
lane connecting East Asia to Australia
ü Global hub and east national hub
development.

ü The development is to create

environmentally sound to support a
sustainable development

ü Part of the Pacific-Rim economic

vibrant
ü Support global synergy to provide
domestic opportunities
 Overview on Palu Special Economic Zone (SEZ)
(future concept of greater megapolitan priority area)

Government Regulation No.31 Th.2014: Palu Presidential Decree No.3 Th.2016:

Special Economic Zone (SEZ) The Acceleration of Priority Infrastructure
Delivery

The objective of Palu SEZ development are for the

following purposes: Government of Indonesia supports with sovereign
a. Mining down streams industry guarantee on the acceleration of the development of
b. International logistic hub strategic national projects – SEZ is in the list.
c. Agro down streams industry.

Palu Special Economic Zone

(SEZ) - Master Plan 2016
Government to support the development of
industrial complex priority outside Java

The Ministry of Industry is now focusing on accelerating

the development of industrial estates outside Java, to
create the new center of growth.
 Palu SEZ is Government’s
Strategic Decision

Government policy is to support the development of industrial complex outside Java to bridge and
upside the acceleration for New Capital City of Indonesia - new center of growth and global synergy
are part of the key strategic development objectives of Palu SEZ & Central Sulawesi

• New center for growth in Sulawesi • Palu is situated in the Indonesian ALKI-2,
and eastern Indonesia North–South corridor is connecting East
• Industrial complex for local Asia to Australia
commodity down stream industries • East Indonesia and global hub
and new industry cluster. development.
• Abundant mineral sources – nickel,
cobalt, iron ore, gold, etc.

• East Indonesia is part of the • The development goal is to create

Pacific-Rim economic vibrant environmentally sound and support
• Support global synergy to sustainable development
provide domestic opportunities
 Palu SEZ Development
Organizational Structure

The President of Republic of Indonesia

a. Compiling the National Master Plan for SEZ;
b. Formulating the general policies and strategic steps to designation and development of SEZ;
c. Determining the standards for infrastructure and minimum services in SEZ;
National Board d. Resolving strategic problems in implementing, managing and developing SEZ; and
e. Monitoring and evaluating the sustainability of SEZ and recommending follow up measures of
the evaluation to the President, including proposing nullification of SEZ status. *)

State Level

Provincial Level
Palu SEZ Regional Board
Chairman: Governor of Central Sulawesi Province
Vice Chairman: Mayor of Palu City
Member: All related Ministry offices at Provincial level

Palu SEZ Administrator - PT STM Tunggal Jaya

Government (Key Strategic Partner)

JO BPST-STM
BPST is by operation of law granted with a mandate to develop and operate Palu SEZ, under
*) Article 17 Law Number 39 of 2009 which BPST in cooperation with STM to carry out the mandate. For that purpose, BPST and
**) Article 21 Law Number 39 of 2009 STM has entered into a Joint Operation Agreement dated 27 September 2017. Since then,
***) Article 23 Law Number 39 of 2009
JO BPST-STM is the primary entity which will conduct the development and operation of
Palu SEZ.
Regulatory Framework

Special Economic Zone Special Economic Zone

“A zone with certain borders in the area of
The Republic of Indonesia which determined
to manage the economical function and Law 39/20091
obtain particular facility.”

SEZ Implementation SEZ Facilities

GR 2 /2011 (2) Jo. GR GR 96/20153
100/20122

Stipulation of Palu SEZ

GR 31/20144 PR 33/2010 Jo.
PR 124/20125

Establishment of Stipulation of Palu SEZ PR 33/2010 Jo.

PT BPST Administrator PR 124/2012
RGR Palu 7/2014 Jo. RGR RGR Palu 6/20147
11/20156

1) Law No. 39 of 2009 on Special Economic Zones;

2) Government Regulation No. 2 of 2011 jo. Government Regulation Number 100 of 2012 on The Implementation of SEZ;
3) Government Regulation No. 96 of 2015 on SEZ Facilities;
4) Government Regulation No. 31 of 2014 on Palu SEZ;
5) Presidential Regulation No. 33 of 2010 jo. Presidential Regulation No. 124 of 2012 on National Board and Regional Board of SEZ;
6) Regional Government Regulation of Palu City No. 7 of 2014 jo. Regional Government Regulation Number 11 of 2015 on The Establishment of Regional
Government Owned Enterprise PT Bangun Palu Sulawesi Tengah (BPST); and
7) Regional Government Regulation of Palu City No. 6 of 2014 on Organization and Working Procedure of Palu SEZ Administrator.
 Logistic and Industrial Development in North-
South Corridor : opportunity & key investment

§ East Indonesia is home to key strategic minerals

§ Indonesia international seaway (ALKI-2),
§ it connects the north-south corridor
§ Part of the Pacific-Rim economic vibrant

1. nickel resource is the best in grade and largest in reserve 8. hydro power energy capacity is available
2, bauxite mine and alumina production is growing 9. ALKI-2 seaway is connecting East Asia, Australia, and south region
3. iron sand and pig iron making is about to start of Africa
4. iron ore mining and steel making has been started in 2011 10. PSA and TP are the global hub port and part of the 21st Maritime Silk
5. refined copper products are ready for down-stream industry Road
6. manganese mining and smelter construction is started in 2020 11. Australia is the backyard of this region
7. coal reserve in east Kalimantan for energy and industry 12. Not to mentioned the oil & gas.
Key Investment
Highlights

• Based on Presidential Decree of No. 58/2017, the Government

gives full support on the development of Palu SEZ by accelerating
Strong support from Central & the process of project permit & licenses and provide some
1. incentives to the investors (e.g. tax incentive)
Regional Government
• other than that, Government also gives support on the
advancement of infrastructures development.

• the East-Indonesia region literally full of resources: coal, gold,

copper, oil and gas, lead, and of course nickel. in 2014, the
government implemented the ban on unprocessed minerals, in an
effort to stimulate smelter construction to develop the
Significant growth in Indonesia’s downstream sector and increase mineral export value.
strategic mineral production: nickel
2. • Indonesia’s nickel ore production growth is 15% in 2016 and by
ore, cobalt, iron ore, gold, copper,
annual average of 10.6% during 2016-2020
etc.
• Indonesian nickel resources are not only huge, they are also high-
quality. The archipelago concentrates more than 40% of the
global total of high-grade lateritic nickel ore (1,8% Ni content and
above)

• the establishment of Palu SEZ is a key milestone in the

development of new industry cluster development in Sulawesi
3. New center for growth
• it is expected to create a new growth in the region (east
Indonesia).

• the government long-term goal: Palu SEZ is expected to

Huge down stream industry
4. contribute IDR7.5 trillion to the local economy turnover, once it is
potential
in fully operated.
Advantageous :

• Capital City of Central Sulawesi Province (Palu)

• Existing Deep Sea Port Pantoloan (Pelindo IV), 18.5 m draft existed & to be expanded into > 30 m
• 1500 ha of Palu SEZ size integrated to the deep sea pot.
• +/- 21 km in distance to the dowtown of Palu City & +/- 25 km in distance to Palu City Airport
• In front of the world trade-logistics route (Indonesia Archipelagic Sea Line 2 – ALKI 2)

• Industrial raw materials are abundant within max-500 km radius, such as mineral-nickel, gold, cobalt,
iron ore, andesite, corn, coconout, cocoa, rattan, marine product, and so on.
• ALKI 2 is main route bulk vessel to transport minerals from Australia to East Asian Countries, such as
Japan, China, Taiwan & Korea.

• Jokowi’s Administration has been decided to shift Capital City of Indonesia from Jakarta to Penajam-
Kutai Kartanegara in East Kalimantan (in between Samarinda & Balikpapan).
• The New Capital City shall be started to be designed and constructed on 2020/2021.
• Palu SEZ is strategically opposite closely to East Kalimantan (New Capital City). There are currently 5
flights per day & takes 40 minute from Palu to Balikpapan/Samarinda
• Palu SEZ/Pantoloan Port is about 300 km in distance to Samarinda & +/- 340 km to Balikpapan. Palu is
abundant of andesite materials for concrete products to supply infrastructure development in New
Capital City. Palu SEZ shall be key industrial zone connected to new capital city of Indonesia (East
Kalimantan).
• Palu SEZ to Samarinda/Balikpapan is about 24-30 hours travels of barging/container shipping.
Natural Advantageous of
Pantoloan Deep-Sea Port
 Brief Background - key milestones
progress of Palu SEZ (2015 – 2020)

KEK Palu is one of the SEZs Report study and assessment on Progress on land acquisition – Some progress by tenants:
initiated by the Government of KEK: Phase 1 (100Ha + 300Ha): 1. PT. Asbuton Jaya Abadi – asphalt industry –
Indonesia as part of the national • Update on Master Plan KEK (June 2016) by Korea • the 100Ha inside in KEK Phase-1 development operated.
zone 2. PT. Hongthai International – resin pine
strategic development 2015- Engineering Consultant Corporation (KECC) on
behalf of PT. STM Tunggal Jaya • 60Ha owned by private - potential tenant trees/terpentine industry – operated.
2019. • Pre-Feasibility Study on Water Supply System at • additional 300Ha in progres by BPST and 3. PT. Kaili Rattan Industry – Rattan Trading –
Sungai Wombo for KEK Palu, Pantoloan Port, and strategic partner operated.
Public (April 2017) by KECC and PT. STM Tunggal 4. PT Wang Hong Indonesia – copper recyling factory
Jaya. -land preparation
• Electric substation study – PLN
1. Establishment of Dewan Kawasan, Badan
• Water supply & dam studied by PUPR Initial infrastructures 5. PT Alfa Industri Mandiri – coconout industry – land
preparation
Administratur and Badan Pengelola
• Estbalishemtn a consortium of Deloitte, Penida
Capital, and HJ Law Firm to manage PMO for
development: 6. PT. Hashimoto Indonesia – biomass products – land
2. Establishment of PT. Bangun Palu Sulawesi • Internal road, pedestrian and drainage facility preparation
KPIC.
Tengah (BPST) as the developer and (1,3km) - 2016
management of KEK 7. PT. Indo Mangan Industri – Manganese Processing –
3. JO/D Palu SEZ establishment between BPST • Fly-over road - 2019 land preparation.
and PT. STM Tunggal Jaya as developer based
International non-deal roadshow • Administrator KEK office, research center for 8. PT Brantas Abipraya – Indonersian SOE –
on the agreement signed on 27 September 2017. and promotion: cacao and ratan construction, water & precast concrete (MOU &
4. Establishement cooperation with Pelindo IV & • South Korea (Jun 2015 and Nov 2017) • Ratan national R&D center, IKM center, and on discussion)
PLN to support the parties involved. • Japan (Sept 2017) PPIRT building 9. CFHI (China First Heavy Industry) – Non Ferrous
5. Establishment of KEK Palu PPP Investment • Hungary (Nov 2015 and Nov 2016) Metal Manufacturing Industry – LOI & discussiong
• JO/D BPST-STM Office
Center (KPIC). • Singapore (Feb 2016) with JO Palu SEZ
• Rattan & Moringa Warehouse & Factory
• China – ASEAN Economic & Industry Exhibition
(June 2016). • Electrical substation 150 kV – civil works on
progress
Status update for investor and
company engagement :

a) Strategic Partner (Developer) :

• PT STM Tunggal Jaya (STM) is a Indonesian Private Company who has been signed & engaged commercially
with BPST (Palu’s SOE) to develop & operate Palu SEZ.
• China First Heavy Industry (CFHI – China SOE) has been discussed and signed LOI for next action engagement
with JO/D BPST-STM being strategic partner in near future.

b) Basic Infrastructure :
• Pelindo IV as Indonesian SOE – owner of Pantoloan Deep Sea Port – is planned on 2nd Semester of 2020 to
upgrade and expand the size of port and capabilities to support as logistics hub of Palu SEZ and economics
growth of Central Sulawesi and fully supporting to New Capital City in East Kalimantan.
• PLN – Indonesia SOE for electricity – has been constructing the 150 kV Substation inside the Palu SEZ area and
also has planned to build the 2x50 MW coal fired power plant near at Donggala (near Palu SEZ).
• PT Brantas Abipraya – Indonesia SOE for precast concrete & construction – has been signed the MOU with JO/D
Palu SEZ (BPST-STM) to enter the precast & water business in Palu SEZ & Central Sulawesi. Brantas is also fully
prepared to manufacture the precast concrete for supporting & supplying to the Palu development & Sulawesi
regions, and also New Capital City Construction.

c) Tenant of Company Engagement at Palu SEZ :

• PT Asbuton Jaya Abadi – Asphalt Industry (Production).
• PT Hongthai International – Pine Trees Resin Industry (Production)
• PT Kaili Rotan Industri – Rattan Industry (Production & Trading)
• PT Tata Kokoh Abadi – Clay Brick-Tile & Ceramics (Production)
• PT Alfa Industri Mandiri – Coco Fiber & Carbon Active (Land Preparation)
• PT Wanhong Indonesia – Copper Recycling (Land Preparation)
Status update for investor and
company engagement (cont’d) :

• PT Indo Mangan Industri – Manganese Smelteing (Land Preparation)

• PT Sarana Dwima Jaya – Light Steel Factory (Land Preparation)
• PT Sulawesi Global Komoditi – Cocoa Dring & Logistics (Construction)
• PT Hashimoto Indonesia – Wood Pelet & Biomass Production (Initial Planning)
• PT Nasana Mitra – Wood Industry (Initial Planning)
• PT Karya Sampaga Biru – Hazardous Waste Toxic Materials Processing – (Initial Planning)
• PT British Bullion Resources – Base Metal Industry (Initial Planning & Preparation)
Government support on peripheral
infrastructure development
Palu SEZ and supporting infrastructure – a combination business & financial scheme proposed

Estate Infrastructure:
1.Power
2.Water Supply System
3.Access Road & Drainage
4.Security System
5.Telecommunication
Activity photos sample of the
company at Palu SEZ

PT Hongthai International
(Pine Trees Resin & Terpentine)

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Activity photos sample of the
company at Palu SEZ

PT Asbuton Jaya Abadi

(Asphalt Products)
Activity photos sample of the
company at Palu SEZ

PT Sulawesi Global Komoditi

(Cocoa Drying & Warehouse)
Activity photos sample of the
company at Palu SEZ

PT Wanhong Indonesia
(Copper Recyling Factory)
Activity photos sample of the
company at Palu SEZ

PT Tata Kokoh Abadi

(Light Steel Factory)

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PANTOLOAN | Deep Sea Port
FLYOVER ROAD | Pantoloan Port