Jakarta. Malaysian plastic giant Thong Guan Industries recently inked a land purchase order to set up a production plant in Central Java's Batang integrated industrial park.

Thong Guan Industries will set up a production plant over a 5-hectare land to manufacture plastic products for domestic consumers and export markets. The plant will produce plastic wraps, garbage bags, and plastic film, to name a few. The Batang project will have an initial investment value of $7 million.

According to Thong Guan's managing director Ang Poon Chuan, Indonesia's large market potential and the industrial park's facilities were what convinced the company to invest in the close neighbor.

"We consider the Batang integrated industrial park as a strategic partner that will support us in expanding our global presence, particularly in Indonesia, which is one of the world's largest markets," Ang Poon Chuan was quoted as saying in a press statement issued by the Indonesian Consulate General in Penang.

The release introduced Thong Guan Industries as one largest plastic packaging producers in the Asia-Pacific. The company runs a manufacturing plant in China. Thong Guan's total annual production capacity stands at up to 150,000 tons. Its turnover reaches 1.2 billion Malaysian ringgits or approximately $268.6 million. The plastic maker did not give a time frame for when the plant's construction would start.

The Batang industrial estate is currently in the process of securing the special economic zone (SEZ) status. Once Batang becomes an SEZ, the government will offer its investors tax holidays of up to 20 years. They are also exempted from having to pay entry duty for goods import during the construction phase. Investors will also be eligible for other fiscal and non-fiscal incentives.

Malaysia was Indonesia's fourth-largest source of foreign direct investment in 2024. Indonesia amassed $4.2 billion in Malaysian FDI that year, government data showed.