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Indonesia plans two major logistics zones

Indonesia plans two major logistics zones
Indonesia has its sights set on creating two free trade zones that will become one of Southeast Asia's biggest logistics zones and rival Singapore, local reports said.

Local media cited President Joko Widodo as saying that the two bonded logistic zones in Cikarang, West Java, and Merak, Banten, will help develop Indonesia's manufacturing sector.

The Merak facility near the coast in West Java is set to serve as a storage facility for fuel logistics, while Cikarang, nearer to the capital Jakarta, will support the logistics-related manufacturing industry, including intermediary goods imported from abroad.

"We want to offer more efficient industrial facilities," Widodo said. Industrialists have blamed high logistics costs for hampering growth and preventing them from competing against neighbouring countries. Finance Minister Bambang Brodjonegoro said the government has finalized the legal umbrella for the establishment of the two bonded zones. The plans however were short on details such as investment amounts needed or investor interest. These two logistics zones are expected to serve as a hub for raw materials, capital goods or intermediary goods to support production.

Bambang has previously said that Indonesia should not rely on overseas storage facilities, especially for its fuel needs. The establishment of the fuel logistics zone could help move oil storage nearer to its market. Indonesia is Southeast Asia's biggest user of fuel.