Aceh's main income earners are petroleum and natural gas, fertilizer, estate produce and agriculture.
Many
potential natural resources have an important role to
activate domestic economy of Nanggroe Aceh Darussalam (NAD),
especially mining and industrial sectors. The two
sectors contributed 68% of the total GRDP. Nowadays,
non-agriculture sectors such as mining, industries and
energy develop fast. However, agriculture sector
including plantation, which covers approximately 60% of
total area, is estimated to grow fast to keep its
development equal with that of the development of
non-agriculture sectors.
Along
with the policies to distribute development of sectors,
the government has set up the Aceh province region into
two (2) investment development zones based on its
configuration, potential resources and limitation. It
has a total area of 57,365.57 km2. Most regions that are
covered with forest areas are rich of a high economic
value commodity that is oil and gas. Other main
commodities include forestry, mining, industries,
fisheries and plantation sectors with its main
commodities such as palm oil, rubber, coconut, clove,
coffee, tobacco, sea and fresh water fisheries, metals,
coal, gold and other minerals.
A recent successful peace agreement between the warring parties in Aceh should also attract fresh investment to Aceh. The conflict have mostly steered foreign firms from investing. Those who are investing in Aceh are profitable; Notable Toronto-based insurer Manulife Financial Corp. (MFC), cement producer Lafarge S.A. (LR) of France, Exxon-Mobil, Holland Coffee.
PRIMARY PRODUCTS
Food Crops: Rice, Corn, Peanuts, Small Green Peas,
Cassava, Vegetables, Sweet Potatoes, and Fruits.
Commercial Crops: Palm Oil, Rubber, Coconut, Coffee and
Cacao.
Livestock: Cows, Buffaloes, Goats, Sheep, Horses, Pigs,
Chicken and Ducks.
Fish Products: Sea and fresh water fishes.
Forest Products: Logs, Sawn-Timber, Processed Woods,
Plywood, Block-Board and Chips.
Mining: Petroleum, LNG, Coal, Gold, Iron, Platinum,
Copper, Tin and Cement.
Handicraft: Gold Works, Traditional Bags, Rattan
Plaintings.
NATURAL RESOURCES POTENTIAL
Aceh
has natural resources which have not been optimally
exploited. The economic sub regional cooperation among
Indonesia, Malaysia and Thailand called
Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) is
expected to accelerate the use of existing natural
resources potential in this area.
INDUSTRIAL ESTATE/ZONE
Industrial sectors are considered as prospective fields
of investment and offers job opportunities. From this
stand point, the local Government prioritized Industrial
Zone of Aceh Besar and Lhokseumawe as one of Prime
Estate Development in order to attract investors
contributing to many industrial sectors.
AIRPORT AND/OR SEAPORT
Air transportation in this province is
supported by 7 airports where as Bandara Blang Bintang
Airport is Banda Aceh as the main airport. In the
1993/1994, Blang Bintang Airport has been landed by DC-9
and Boeing 737 air lines. This airport has already
served 975 flights, 58,214 passengers, 831,319 Kg of
flight goods and 101,950 kg of airmail, and also 421,837
kg of baggage. The other airports such as Cut Nyak Dien
Airport in Meulaboh, Cut Ali Lasikin in Sinabang, Cut
Bak U in Sabang, Tanjung Seumantok in Langsa and
Sucfindo in Singkil, and also Malikul Saleh Airport in
Lhokseumawe are considered as pioneering airfields.
Aceh has 13 oceans ports. Some of them are Kuala Langsa Harbor classified as fourth class ocean harbor for serving international trade, with a quay of 100 m in length and 8.1 m in depth. Malahayati Harbor classified as third-class seaport with a quay of 100 m in length and 6-7 m LWS in depth. Sabang Harbor classified as fourth class seaport for serving international trade with a quay of 328 m in length and 7.5 m in depth, while a maximum of 150 m in length for ships moored on this harbor. In addition, there are three special seaports, such as Blang Lancang Harbor for exporting Liquid Natural Gas and condesat, Pupuk Asean Seaport and Pupuk Iskandar Muda in Lhokseumawe and also Laut Lhok Nga Aceh Besar Seaport for exporting cement.
SKILLED LABOR DEVELOPMENT
The
development of manpower through training and precisely
effective education organized by Job Training Center,
Ministry of Manpower is to increase productivity and
technological knowledge, management and entrepreneurship
of trainee in order to create labors and entrepreneurs
who are skilled, autonomous, capable to grab and to
exploit any opportunity, and ready to compete in doing
business.
The regional economic development, Aceh puts the base on the people economy. Most of the population are farmers, whose economic resource depends on agricultural sector: Therefore, the development of the people economy must be stressed on these fields including forestry, food crops, fishery, plantation, animal husbandry, agro industry and tourism.
In the sector of forestry, Aceh has a great potential. Although the forest concessions have been given by government to national private companies, prospective investors from foreign countries are always welcomed to cooperate with the Local Concession Holders (Hak Penguasaan Hutan - HPH) in plywood industries, wood processing, moulding industries, and other wood related business.
Forest in this region produces meranti (shorea) wood, semantok lime, marine resin, pinus mercussi, and honey resin. Other forest products which also can be found in Aceh are sega rattan, manau or sambu rattan, resin tree, jerenang, swallow nest, wood bark, etc.
The
development of food crops agriculture as part of
agricultural development has the goal to increase the
income of food crops farmers through intensification,
extensification, diversification and agribusiness.
Therefore it is deemed necessary to designate zoning for
food crops commodity based on priority scale upon which
a strategic development policy can be set up to be used
as patterns and guidelines in implementation. The
success in this sector will mean more opportunities for
agro industry and more employment
openings for the job seekers. The agribusiness it self
can playa major role in creating job for the farmers,
and thus providing them with a better purchasing power.
Aceh has approximately 56,363 sq. km. of potential
territorial waters for fishery. They include coastal
waters of estimated 23,563 sq. km. and deep sea waters
of about 33,000 sq. km. In addition, there is also the
exclusive economic zone of 200 miles from the coastal
line. Beside these waters there are also brackist water
area for inland fisheries.
Both in the deep sea and coastal waters in the western
part of Aceh give various kinds of fish. It can be found
in large quantity; among them are tuna, skipjack, shark,
bawal (stromateus), mackerel, shrimp, and a number of
small fish.
Investing in large scale cattle industry requires large
pasture areas. Aceh has enormous pasture areas spreading
and scattered over all the regencies of the province.
Aceh Besar 41,000 Ha, Pidie 12,000 Ha, Aceh Utara 13,189
Ha, Aceh Timur 10,000 Ha, Aceh Tengah 66,500 Ha, Aceh
Tenggara 4,500 Ha, Aceh Barat 80,000 Ha, Aceh Selatan
19,821 Ha. Increasing livestock production in the
future will depend not only on small holder's
enterprises, but also on large scale cattle raising
companies in order to be able to keep a balance between
production supply and market demand in the region.
Therefore the local government always welcomes private
sectors to invest in this field. In order to support
the development of livestock production at least four
activities should considered; breeding, food supply,
farming and processing. These activities in turn will
create opportunities for new business in the region.
The
zone for large scale plantation is stretched from Aceh
Timur, Aceh Utara, Aceh Singkil, Aceh Selatan and Aceh
Barat. These plantations produce Crude Palm Oil (CPO),
rubber, coconut, arabica coffee, and other commodities.
Annually Aceh produce approximately 300,000 tons of
Crude Palm Oil (CPO), 65,000 tons of kernel, 80,000 tons
of rubber, 60,000 tons of coffee and 100,000 tons copra.
Aceh also produces other commodities such as nutmeg,
sugar cane, patchouly oil, areca nut etc. Nowadays,
all of those products are exported in the form of raw
materials. This is an opportunity for potential
investors to establish processing industries of
agricultural products in the province for example an
industry to process CPO and kernel for consumer products
such as butter, soap, cooking oil, etc.
This region also has a great potential in mining or mineral and energy resources such as oil and gas. Beside these it can be also found gold, copper, zinc, coal, silica, limestone, marble, granite etc.
Tourist development in Aceh has recommended that some integrated tourist resorts in the province should be set up. The most urgent in this regard are the tourist resort surrounding Banda Aceh itself such as Weh Island and Pulo Aceh.
The following priority will be the tourist resorts in Leuser National Park in Aceh Tenggara, and those other resorts in Simeulue Island and Banyak Island as the marine tourism activities.
OVERVIEW OF INVESTMENT OPPORTUNITIES
FOREST PRODUCT PROCESSING SECTOR
Productive forest areas have actually been given to national timber companies under the Forest Concession Holders, but investment in this sector is still widely open. Investment is also still widely open in re-forestation of industry plants (HTI). Similarly, investment in forest product processing including pulp factory. Plywood factories at present are only found in Aceh Timur; where as the raw material sources are mostly found in Aceh Barat , Aceh Selatan, Singkil and Simeulue. In these areas, wood-processing factories, moulding, etc should give a promising prospect.
WOOD WASTE
To
utilize wood waste which is presently discarded, the
regional government welcomes very much investor in
forest product processing industries such as processing
of wood waste, wood twigs, sawmill waste and wood
remainders to become valuable products such as particle
woods, wood chips, toys, wood handicraft, furniture,
etc.
PLANTATION AND PLANTATION PRODUCT PROCESSING
As the width of plantation sector and the great possibility for expansion, investments in this sector are very highly promising. Potential investors can invest individually or cooperatively with existing companies. which lack capital for further development.
In Aceh Timur and Aceh Utara, the density of the existing plantation still gives great feasibility for some expansion and replanting and for increasing the capacity of the processing factories of both oil palm and rubber.
The vast areas for new plantation can be found in Aceh Barat, Aceh Selatan and Singkil. In three regencies the possibility of potential investors is to form cooperation with existing Local Utility Holders (HGU) who are not yet able to plant all the areas under their concession. Opportunities are also open for potential investors to get local utility holders status from the government for the areas to which the existing utility holder status has expired.
CPO PROCESSING
In processing industry, opportunities are still open to build oil palm processing mills to become CPO and kernel to be other consumer products such as frying oil, margarine, soap, cosmetic products, etc.
RUBBER
The
existing rubber production requires the presence of
industries to further process the rubber to produce
automotive spare part, electric components, medical
equipment, etc. The-existing rubber plantation could
only produce Rub Smoke Sheet (RSS) and Crump Rubber:
Cooperation can also be established to produce more
quality rubber that is consent rate latex, which has
prime quality and has good prices on world market. These
products can also be supplied to further industries.
COFFEE
Arabica coffee and Robusta coffee which are produced in the highland areas of Aceh should allow feasibility to establish coffee processing industries to produce coffee powder and instant coffee in export standard through Affiliation and cooperation with multinational coffee producers.
Coconut
Community coconut with production capacity more than
80 thousand tons per year is quite potential
for establishing several integrated coconut processing
which will process coconut, from the husk, shell, frying
oil, coconut milk to processing coconut juice to nata de
coco
OTHER PLANTATION PRODUCT
In a limited scale a factory can also be established to process other plantation product such as nutmeg, cashew fruit, patch only oil, kemiri, brown sugar, betel/nut, clove and cocoa.
FOOD CROPS AND HORTICULTURE INDUSTRY
Food crops and horticulture production in Aceh is not totally absorbed by local market. Soya beans for example, has been sold outside the region in the form of raw material. The use of soyabeans varies from making tau fu, soybean cracker and animal feed to making soybean milk, soybean flour, soybean oil, etc. These various demands require the development of processing industry of the various food crops to become daily consumer products.
FRUITS AND VEGETABLE
At present, the main regions producing fruits are Aceh Besar (mangoes, rambutan, langsat, durians) and Aceh Utara (bananas, papaya, soursop, oranges). Vegetables and fruits from high land are supplied from Aceh Tengah (cabbage; tomatoes, potatoes, avocados, marquises, oranges, and pineapples). Fruit processing and canning industries in these three regencies should promise a profitable business.
ANIMAL HUSBANDRY AND LIVESTOCKS PRODUCT INDUSTRIES
Investment opportunities in animal husbandry and
/livestock product can be described as follow:
Animal Feed - A number (of raw
materials can be found here such as soybean, by-product
of rice milling, fish, maize etc. All these should be
useful for the establishment of animal-feed industry in
Aceh. The distribution of this product is not only for
local needs but also for to other regions and exported
as well. The location for this industry can be
considered Lhokseumawe with a capacity of up to 2000
tons per year:
Butcher's House - Up to present, livestocks in Aceh are slaughtered in a traditional way and not processed in accordance with modem market standard and therefore it cannot compete in national and regional markets. This should allow opportunities to build representative butcher houses in Banda Aceh and in Lhokseumawe, each with capacity of 100 heads per day.
Beef Cattle Raising: The availability of vast plateaus and meadows in Aceh should allow opportunity for beef cattle raising in Aceh Besar, Pidie, Aceh Utara, Aceh Barat and Aceh Selatan.
Meat Canning Industry: To support /livestock raising efforts (ranches) and butcher' houses; it is necessary to build meat canning industry. The location should be close to the butcher houses.
Leather Tanning: The supply of the 50.000 pieces of buffalo and the cattle hides, also 500.000 pieces of goat hide should give the best reason to build a hide processing and tanning industry. This industry should also support other related industries such as shoe factory, leather bag factory and furniture industry.
Poultry Breeding Business: One of
the obstacles in the effort to raise poultry population
is the lack or the limitedness of day one chicks or
ducks.
It has been suggested that this region should have an
enterprise which produces chicken and duck breeds up to
about 10.000 heads per day.
FISHERY SECTOR
Exploration and exploitation of oceanic potential
that Aceh has. Investments in the following areas are
most suggested:
Fresh water and brackish water fish culture by utilizing
coastal waters both in East Coast and in the West Coast.
. Integrated fishery industry, consisting of
shipbuilding, fish catching, fish processing and
marketing.
. Fish canning industry and fish processing factory.
Fish flour industry for making animal feed.
. Pearl mollusk culture (raising) in Banyak Island.
OIL AND GAS BASED INDUSTRY
At present, Lhokseumawe industrial zone has been the centre of LNG and LPG production, in addition to a fertilizer factory. All these have happened after natural gas was found in Arun in 1972.
Natural gas has been used as raw material for production process and as a source of energy. However, as of present only four giant industries have been operating: PT. Arun which produces LNG and LPG, PT. Asean Aceh Fertilizer (MF), and PT. Pupuk Iskandar Muda (P/M), which produce urea fertilizer, and PT. Kertas Kraft Aceh (KKA) which produces kraft paper.
Actually this industrial zone has for a long time invited investor in all sectors to build industries as continues to the natural gas industry using the natural gas as raw material such as Aromantic and Petrochemical factories. Downstream industries using urea fertilizer and ammoniac can also be developed.
TOURISM RESORT
The
integrated tourist resorts should include sufficient
space for hotel buildings, golf courses, shopping
arcades, cultural centers and other relevant
facilities. Building a tourist resort requires special
capital arrangement and cost effective assessment,. When
implemented under a good management, business
undertaking in this sector have proved to proffer the
investors a long term profit.