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SCMP Reporter

MORE than 130 foreign companies, including four from Hong Kong, have invested on Batam island, an important investment, trade and tourism location, according to a recent report.

  The Batam Industrial Development Authority (BIDA) said in a recent publication that, up to June last year, total foreign and domestic investment totalled US$4.34 billion.

  Private sector firms, most of them from Singapore, accounted for the bulk of the investment.

  Most of the money went into industrial projects, tourism-related developments and real estate, the BIDA said.

  The authority celebrated its 22nd anniversary last year.

  Hong Kong firms invested about US$94 million during the period under review.

  The territory was among the four largest investors - besides Singapore - on the island.

   Hong Kong investments included a packaging joint venture, hotel and a golf resort.

   Batam has become a significant contributor to the national economy with the rapid growth of industry on the island.

   The island is 415 square kilometres in area and has a population of about 140,000.

  All projects seeking approval must be non-polluting ventures.

   To attract more foreign ventures, the Indonesian Government has extended Batam island's industrial and bonded zone status to several surrounding islands, including Rempang and Galang.

  Over the years, the government has also been developing the necessary infrastructure - roads, air and sea ports, water, telecommunications and electricity.

  Batam island is 20 kilometres southeast of Singapore.

  Foreign firms who want to commit their capital on the island are granted various incentives and facilities.

  Export-orientated ventures in the bonded zone are allowed full foreign ownership. They can operate for 20 years, after which 20 per cent of the shares have to be offered to a domestic investor.

  Industries are protected against nationalisation and profits can be fully repatriated.

  The BDA said there was an abundance of cheap labour.

  Investment and immigration formalities have been simplified for foreign firms.

   Rempang and Galang and the surrounding islands that were declared part of the Batam industrial and bonded zone are now being developed for investment.

   Infrastructure development is underway.

     and the government hopes to connect the surrounding islands to Batam by building a network of bridges.

   Rempang, which is 166 square kilometres in area, is about three kilometres southeast of Batam, and Galang, which is 80 sq km in area, is half a kilometre from Rempang.



Batam investor zone attracts interest