Indonesia to Launch 6 SEZs, Including Global Halal Hub

Industry Insights from Next Move Strategy Consulting

Indonesia is poised to strengthen its position in the global economy with the establishment of six new Special Economic Zones (SEZs), including a dedicated hub for the halal industry in Sidoarjo, East Java. The initiative, awaiting approval from President Prabowo Subianto, aims to capitalize on untapped market opportunities and drive economic development through targeted industrial and service-based zones.

Targeting the Global Halal Market

The proposed Halal SEZ in Sidoarjo is a cornerstone of Indonesia’s ambition to become a major player in the global halal supply chain. Susiwijono Moegiarso, Secretary of the Coordinating Ministry for Economic Affairs, highlighted the zone’s potential to fill critical gaps in the global market. “We want to capture added value from products whose initial processing is done in China, but whose markets are in the Middle East,” Moegiarso stated during a press conference in Jakarta on Tuesday.

A key focus for the Halal SEZ is the gelatin industry, where Indonesia aims to produce halal-compliant alternatives to pork-based gelatin, predominantly manufactured in China, to meet demand in Middle Eastern markets. Several investors have already expressed interest in the gelatin sector and its derivatives, signaling strong market confidence in the initiative.

Impact on the Gelatin Market

The establishment of the Halal SEZ in Sidoarjo is expected to influence the global gelatin market by introducing halal-compliant alternatives to pork-based gelatin, which is predominantly produced in China. The initiative targets demand in Middle Eastern markets, where halal certification is critical. Indonesia aims to capture added value in the gelatin supply chain by producing products locally for these markets. Several investors have expressed interest in the gelatin sector and its derivatives, indicating potential for growth in this area.

Expanding Indonesia’s SEZ Framework

The six new SEZs join Indonesia’s existing network of 25 zones, comprising 13 industrial and 12 service-focused areas. The recent approval of the Batang Industrial Special Economic Zone (KITB) marks progress in the government’s broader SEZ strategy, with the remaining six proposals under review.

As of June 2025, Indonesia’s SEZs have attracted Rp294.4 trillion (US$19.4 billion) in investments, creating approximately 187,000 jobs. In the first half of 2025 alone, SEZs recorded Rp40.48 trillion in investments, achieving 48.2 percent of the year’s Rp84.1 trillion target. This momentum underscores the critical role of SEZs in driving economic growth and job creation.

Key Highlights of the SEZ Initiative:

• Halal Industry Focus: The Sidoarjo SEZ will target high-demand halal products, such as gelatin, to serve global markets, particularly in the Middle East.

• Investor Interest: Early commitments from investors in the gelatin sector signal strong market potential.

• Economic Impact: Existing SEZs have generated significant investment and employment, with new zones expected to further boost these figures.

• Strategic Market Positioning: Indonesia aims to capture added value in global supply chains by addressing unmet demand for halal-compliant products.

A Vision for Global Competitiveness

The establishment of these SEZs reflects Indonesia’s proactive approach to economic diversification and global market integration. By prioritizing sectors like the halal industry, the government seeks to leverage its strategic geographic position and growing investor interest to enhance its economic footprint.

As the approval process moves forward, the Halal SEZ and its counterparts are expected to play a pivotal role in positioning Indonesia as a hub for high-value industries and services, fostering sustainable growth and global competitiveness.

Source: https://en.antaranews.com/news/378941/indonesia-to-establish-six-new-sezs-including-global-halal-hub 

Prepared by: Next Move Strategy Consulting