The Singapore Manufacturing Federation (SMF) is encouraging more healthcare and electronics companies to expand their operations in the Batam, Bintan, and Karimun (BBK) area of Riau Islands Province. This aligns with Indonesia's efforts to develop new industrial areas to support the manufacturing sector and improve port connectivity between the two countries.

Singapore has been one of the largest foreign investors in the BBK area, having been the largest foreign investor in Batam City since 2023. In the first half of last year, Investments from Singapore to Batam City reached S$617.3 million, or Rp 8.08 trillion (at Rp 13,100 per S$1) according to Channel News Asia on Mar. 28, 2026. This amount is equivalent to 69 percent of total foreign investment in Batam City.

In a regional investment seminar on Mar. 24, 2026, the SMF reminded manufacturers to consider several factors before expanding overseas. SMF Vice President Melvin Tan stated that electricity reliability varies from region to region, so businesses need to understand energy constraints and needs before investing.

The BBK area is approximately a 40- to 90-minute ferry ride from Singapore. The region of Riau Islands is also part of the Singapore-Johor-Riau growth triangle economic partnership, proposed in 1989 by then-Singaporean Deputy Prime Minister Goh Chok Tong.

This initiative combines Singapore's strengths in management, technology, and infrastructure with the labor, land, and natural resources of the State of Johor, Malaysia, and Riau Islands. This concept remains relevant today, especially with the advent of new initiatives like the Johor-Singapore Special Economic Zone.

Currently, the BBK area has at least five special economic zones focused on several industries, including healthcare, electronics, and aviation. These zones offer tax incentives, ease of licensing, and infrastructure to attract foreign investors.

Companies operating there span the manufacturing, logistics, information technology, and data center sectors. A "twinning" strategy is implemented in the partnership between Singapore and the BBK area, where headquarters and research facilities are located in Singapore, while large-scale manufacturing and digital operations are located in BBK due to more efficient land, labor, and utility costs.