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Singapore GLC in Joint Venture to Launch Indonesian Data Centre

It might seem that Singapore is bagging all the data centres, given the announcement by social media and search engine giants in the last month alone. But that analysis might be naïve.

Indonesia is about to receive a data centre, as part of a joint venture between a Singapore government linked company and an Indonesian conglomerate. This isn’t Salim Group’s first data centre. In fact, the Indonesian conglomerate already owns and operates an Indonesian data centre which serves financial institutions and enterprise customers.

Adding another data centre is almost a necessity. More Indonesians are getting online to transact and relax. E-readiness levels are soaring. Concurrently, its data centre services need to match the country’s voracious appetite for the Internet. Indonesia’s data service market is the fastest growing in the region, with a CAGR (compound annual growth rate) of 35%.

Singapore Government-linked company, Keppel Group, will work with Indonesia’s largest conglomerate to develop and operate a high-availability data centre in Bogor, 35km away from the archipelago’s capital.

Known as the IndoKeppel Data Centre 1 (IKDC 1), the data centre will span across 105 300 sq ft. It features Tier 3 concurrent maintainability standards for power and cooling. Completed over a course of three phases, the data centre’s core and shell, including its first phase fit-out, is to be completed by the first half of 2020. The project involves joint ventures with Keppel Data Centres and the Alpha Data Centre Fund (Alpha DC Fund) – a wholly owned subsidiary of Keppel Capital and asset management arm of Keppel Corporation Limited.

The underlying 3ha of designated land will be the first phase of a larger 7ha data centre campus development. That approximates to about seven football fields. The massive centre is designed to cater to growing demand for a quality data centre in Indonesia.

The project is a 60:40 joint venture distribution, with the Indonesia partner being the majority. It is believed that the capabilities of both companies will produce a dynamic project for Indonesia. Keppel Group has an impressive record of owning, developing and operating high-availability data centres across Asia Pacific and Europe. The Indonesian conglomerate’s credentials are not to be understated. Although the company has expertise in food manufacturing and palm oil production, its portfolio in recent decades reflects changes in the market.

The Director of the group, Mr Sugiharto Darmakusuma, said, “For the past decade, the group has been keen on preparing and expanding its Salim Digital Ecosystem to support the nation’s transformation to Industry 4.0. It’s here.”

The Digital Ecosystem is a collaborative project with other business which aims to facilitate convenience and connectivity.

Mr Darmakusuma’s enthusiasm is not out of place. He added that the company’s investment in fibre connectivity over the last ten years have paid off. Now, the company is one of the few players in Indonesia which possess this capability and with extensive in-land reach. Submarine cables connect Java and Singapore.

He added, “We are expanding our data centres to achieve a global presence and we believe that Keppel Data Centres is the right partner to achieve that.”

Similarly, Singapore has high stakes in the project’s success. Mr Alvin Mah, CEO of Alpha Investment Partners said, “[Indonesia’s] population of more than 260 million makes it the largest base of internet users in the region. With internet penetration rate currently at about 50 percent, e-commerce and cloud service providers are realising the market’s potential and are looking to make inroads, in turn bolstering data centre demand…Unique asset classes such as data centres continue to attract strong investor interest. We look forward to adding another quality asset to the Fund’s portfolio with the aim of delivering the best returns to investors.”

Projects like these are likely to become common place as ASEAN steals the spotlight in the global economy. Mr Wong Wai Meng,  CEO of Keppel Data Centres said the partnership is indicative of Keppel Data Centre’s strategy of “working with strong local players in high growth markets to design and build the robust infrastructure necessary for the digital economy’s expansion and future proofing. We make sure that there’s flexibility for growth and future capacity when our customers need it – power, space and connectivity should always be available to allow our customers to continue growing in our data centres.”

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