Indonesia’s Modern Halal Valley industrial estate hopes for business uptake after partnering with four Islamic banks
JAKARTA – The developer of Indonesia’s Modern Halal Valley (MHV) has partnered with four Islamic banks in a bid to attract companies to set up shop in the integrated halal industrial cluster.
Modern Industrial Estate (MIE), a unit of local property developer Modernland Realty, has brought in Bank Mandiri Syariah, BRI Syariah, BNI Syariah and Bank Muamalat Indonesia to provide tenants of the halal park with financing facilities they may require, Pascall Wilson, MIE’s President Director told Salaam Gateway.
This is in line with the integrated approach of the National Islamic Finance Committee (KNKS)—the coordinating body for the implementation of the Shariah Economy Masterplan—that told Salaam Gateway earlier this month it wants to attract Islamic financing to halal industrial estates.
The under-construction Modern Halal Valley is part of the Modern Cikande Industrial Estate (MCIE) in Banten, around 100 kilometres west of Jakarta.
Pascall hopes the accessibility of Shariah-compliant financing will help companies that want to buy industrial lots or warehouses from the developer.
"We collaborated with [the Islamic banks] to facilitate our potential tenants within the areas. Currently we are exploring collaborations with several potential tenants from F&B, pharmacy, cosmetics as well as its supporting industries,” said Pascall.
One potential tenant is the Thai conglomerate Charoen Pokphand, according to Pascall. Among other things, the Thai company is a large exporter of halal poultry.
Modern Halal Valley will cover 500 hectares consisting of halal integrated supply chain, standard factory buildings, industrial land, and logistics park, said Pascall.
It will be developed in stages. The first phase involves the building up of industrial land, halal certification facility, and commercial and factory buildings covering 150 hectares in the second half of next year and which will be completed within two years at the latest.
The following phases will work on the remaining 150 hectares and 200 hectares.
Modern Industrial Estate is not seeking external financing for the development of Modern Halal Valley.
"We estimate the total investment needed for this project is around 500 billion rupiah ($35.44 million),” said Pascall.
“The funding will be sourced from first phase sales, which we expect to be around 2 trillion rupiah ($150 million)," he added.
The developer of Indonesia’s first halal hub hopes the government will extend incentives, such as tax holidays, to promote the development and use of halal estates in Indonesia.
“We are still waiting for regulations and incentives from the Ministry of Finance and Ministry of Industry. We want at least the same tax holiday incentives like in Malaysia," he added.
Malaysia extends income tax exemptions for a certain number of years for operators in its halal parks as a way to promote occupancy and use of the properties.
Modern Industrial Estate is also working with Barakah Taiwan Halal Hub that will provide technical assistance and share its own experiences with halal facilities. The organisation was set up in February 2018 and one of its services is Muslim-friendly hospital certification.
"The halal industrial zone that we have developed has infrastructure and facilities that support halal management and distribution, both to meet the needs of the domestic and international markets,” said Pascall.
“We hope this cluster will later become the ecosystem of the country’s halal industry.”
(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim [email protected])
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