Central Java Sees Strong Manufacturing Investment Momentum

RRI.CO.ID, Jakarta - Central Java remains one of Indonesia’s most attractive investment destinations, particularly in the manufacturing sector.

Secretary of the Coordinating Economic Affairs Ministry, Susiwijono Moegiarso, said that land occupancy in the Kendal Special Economic Zone (SEZ) and the Batang Integrated Industrial Zone (KITB) has reached 100 percent.

He said new investors are already lining up to enter both zones. “We’ve proposed expansion and development, and the process is still ongoing,” Susiwijono said in a statement in Jakarta on Sunday, August 30, 2026, as quoted by Antara.

The strong investment interest is supported by manufacturing’s role in Central Java’s economy. The manufacturing sector contributes 33.18 percent to the province’s economic output.

Central Java’s economy grew 5.80 percent in the first half of 2026 on a cumulative-to-cumulative (c-to-c) basis. According to Susiwijono, investment and industrial development are key factors in maintaining this growth momentum.

“In fact, if we look at the composition of development in Central Java, the investment potential remains very significant,” he said.

In the first half of 2026, realized investment in Central Java reached IDR 48.54 trillion (approximately USD 2.73 billion), or 48.99 percent of the province’s 2026 investment target of IDR 99.09 trillion. The realization consisted of Foreign Direct Investment (FDI) worth IDR 25.92 trillion and Domestic Direct Investment (DDI) worth IDR 22.62 trillion.

The five regions with the largest investment realizations were Semarang City (IDR 6.57 trillion), Kendal Regency (IDR 6.56 trillion), Batang Regency (IDR 6.11 trillion), Temanggung Regency (IDR 4.58 trillion), and Demak Regency (IDR 3.34 trillion).

Susiwijono said Central Java has strong investment prospects, supported by industrial zone development and the manufacturing sector’s significant contribution to the regional economy.

Physical investment—or gross fixed capital formation (GFCF) -- also plays a major role in Central Java’s economy, contributing 31.52 percent, higher than the national GFCF contribution of 29.36 percent.

However, he noted that ensuring certainty in the investment process remains essential. Challenges faced by investors, he said, are not limited to licensing issues.

“In day-to-day operations, there are always many challenges and obstacles,” he said.

The central government has established a consultation mechanism for local administrations and investors facing obstacles. This support is provided because regulatory authority, policies, and several investment programs fall under the central government’s jurisdiction. ***