More S'pore firms setting up lower-cost bases in Riau Islands

Batam, Bintan and Karimun offer land, labour near Republic in two-hub model

- Annabelle Liang Correspondent

More Singapore companies are adopting a “twinned operations” model by pairing domestic activities with lower-cost bases in Indonesia’s Batam, Bintan and Karimun (BBK), creating a complementary two-hub setup, said the Economic Development Board (EDB).

Singapore is one of the largest foreign investors in the BBK, and has also been recorded as Batam’s top foreign investor since 2023.

In the first half of 2025, businesses in the Republic channelled investments worth 7.9 trillion rupiah (S$614 million) into Batam, or 69 per cent of the island’s total foreign direct investment.

“For Singapore-based manufacturing companies, BBK offers an economic and strategic hinterland. It provides manufacturers with the land and manpower resources in a location that is close to their operations in Singapore,” EDB chairman Png Cheong Boon told a BBK business forum on Nov 18.

Mr Png added that “the region is a competitive base for companies looking to expand their footprint and strengthen supply chains in Southeast Asia, and develop new market opportunities in Indonesia, which is Southeast Asia’s largest economy”.

It is a strategy which has worked for Schneider Electric for more than two decades.