President Joko "Jokowi" Widodo officially announced the commencement of seven strategic projects located in a number of regions in North Sumatra, via a teleconference at Kuala Tanjung Port in Batubara regency on Tuesday.
The projects comprise Kuala Tanjung Port, an aluminium smelter at state-run PT Inalum, the Kuala Tanjung-Sei Mangkei Integrated Industrial Zone, state power company PT PLN's Sei Mangkei power transformer, the 600,000-ton capacity Sei Mangkei cooking oil plant, the Sei Mangkei Special Economic Zone (KEK) and the 17-kilometer Medan-Binjai toll road.
Jokowi said all projects should be completed in two years.
"Two years from now in March, I will inaugurate them. They must not be delayed," said Jokowi during a groundbreaking ceremony at Kuala Tanjung Port on Tuesday.
In his address, Jokowi said he had previously thought the integrated projects were too ambitious, but after field inspections, he decided they were realistic.
He asked for the projects to be carried out collectively as they involved state port administration firm PT Pelindo, state plantation firm PT Pekebunan, highway corporation PT Jasa Marga, PT Inalum, PT PLN and the private sector.
"Upon completion, I hope many investors will operate here, especially at the Sei Mangkei Industrial Zone, because it will be integrated with Kuala Tanjung Port," said Jokowi during a dialogue with the Sei Mangkei Special Industrial Zone management.
Jokowi said Kuala Tanjung Port would become the biggest port in western Indonesia with a capacity of 60 million 20-foot equivalent units (TEUs) annually, comparing it to Jakarta's Tanjung Priok Port, which is only able to serve 15 million TEUs of containers annually.
He expected that raw materials would no longer need to be exported from the western part of Indonesia given the presence of the industrial zone supported by the port.
"Every commodity should be semi-processed or processed [at the location]. We also want exports to rise to achieve a trade surplus," said Jokowi, adding that this would lead to high economic growth.
North Sumatra Governor Gatot Pujo Nugroho said the projects were very strategic and would change the perception of North Sumatra's economy in the future.
He expressed optimism that Sei Mangkei KEK, which would be integrated with Kuala Tanjung Port, would contribute a 0.7 per cent increase to North Sumatra's economic growth.
"The 7,000-hectare Kuala Tanjung-Sei Mangkei Integrated Industrial Zone will change the face of the province's economy in the future from raw material production-based to downstream industrial-based, which will bring bigger added-value," said Gatot.
He added that the Sei Mangkei KEK, the first integrated industrial area in the country, would be a national role model for other special economic zones.
Gatot said Kuala Tanjung Port, built by PT Pelindo I, would become the biggest port in Indonesia with a length of 400 meters and trestle length of 2.7 km.
He added that the port would be equipped with a fuel storage capacity of 145,000 tons and a container yard able to accommodate 400,000 TEUs.
PT Pelindo I spokesman Eriansyah said the Kuala Tanjung Port project was in the spotlight of world trade, as it would be able to compete with ports in Singapore and Malaysia.
He added that the port was projected to become a global control hub.