The Aceh Besar regency is establishing the Ladong Industrial Center, covering around 66.68 hectares with potential investment of IDR196.41 billion. It is located around 20 kilometers from Aceh capital, Banda Aceh.
Aceh Besar has a population of 407,775 people with a total area of 2,969 square kilometers. Majority of its population, or 99.63%, is Muslim.
Strategic locations to create profitable opportunity
The Aceh Besar regency administration began to establish the industrial area in 2020 with an internal rate of return (IRR) of 14.75%, a net present value (NPV) of IDR102.21 billion, the payback period of eight years and an investment worth of IDR196.41 billion.
The ownership of Ladong is 100% by the Aceh provincial administration. Since 2019, PT Pembangunan Aceh (PEMA) is resposible for the development of Ladong area. Offering an easy investment, Ladong focuses on food industry, manufacturing, logistics and chemical industry.
Ladong has several advantages including its strategic position. Its location is 28 kilometers away to the Sultan Iskandar Muda international airport, to the Malahayati port about 10kms away, the Ulee Lheue port about 30kms away and the Aceh-North Sumatra toll road which is only about 9kms away. The industrial area is also very close to the international shipping lane of the Malacca Strait.
The regency also offers wide range of unique products in Aceh, abundant natural resources especially crude palm oil (CPO) and abundant fishing resources as well as abundant human resources in supporting the labor in the area of around 147,000 workers.Â
The investment for Ladong Industrial Center is for land rent, building rent, office units, multi-use units, warehouse units and waste management. In addition, there will be an increase in land sizes for some areas such as offices around 1.5 hectares, Wastewater Treatment Plant (IPAL) around 7.4ha and low-cost apartments (Rusunawa) around 2.7ha, public area around 2.3ha, public facilities around 1.1ha and the commercial area around 51.98ha.
Potentially, the industrial area could carry out shipping with a volume of 19,245.7 million tons per year and petroleum at about 15.2 million barrels per day. The profitable shipping lanes in the Malacca Strait is crossed by over 70,000 ships each year.
On the other hand, the government gives several incentives for investors, such as three hours of service from the Investment Coordinating Board (BKPM), one-door delivery through online single submission (OSS), customs clearance on machines and goods import, tax exemption, security, center of logistics and production and discounts on rent.
Challenges to investments
The Geological Agency of the Ministry of Energy and Mineral Resources (ESDM) through the Center for Volcanology and Geological Hazard Mitigation (PVMBG) had established a map for vulnerable places in Indonesia. Aceh is categorized as weak against terrorism and radicalism influences.
“The Geological Agency through the Center for Volcanology and Geological Hazard Mitigation (PVMBG) has given an early warning in the form of a disaster vulnerability map. So from the map that we issued, almost all areas of Aceh Province are in the medium to high category,” said Head of the Geological Agency, Ego Syahrial, in 2016.
The National Counterterrorism Agency (BNPT) includes Aceh in its list of vulnerable regions in Indonesia that are prone to terrorism and radicalism.
Meanwhile, Comr. Gen. Suhardi Alius, the Head of the BNPT in 2016, Aceh was one of the areas which were very prone to terrorism and radicalism as a result of a 2019 research during the inauguration of 32 provinces of the Terrorism Prevention Communication Forum (FKPT) board.
