Medan is the capital city of North Sumatra Province and the largest city on the island of Sumatra. Known as a multicultural city where various ethnic groups coexist, it is home to Batak, Javanese, Malay, and Chinese communities, among others, forming a diverse and integrated society.

This article introduces the basic information about Medan, such as its population and transportation, its key industries, and essential points and considerations for Japanese companies considering entry into the market, while incorporating data and videos.

Basic Information about Medan

Location, Area, and Population

Medan is located in the northeastern part of Sumatra Island and serves as the capital of North Sumatra Province. Although most of Indonesia is situated in the Southern Hemisphere, the equator runs through the middle of Sumatra, placing the northern half of the island, including Medan, in the Northern Hemisphere.

With a population of approximately 2.5 million, Medan ranks as Indonesia’s fifth-largest city, following Jakarta, Surabaya, Bandung, and Bekasi (when counting Jakarta as a single city).

• Area: 279.29 km²
• Population: 2,498,293 (2025)

The population of Medan has increased by 12.1% over the past ten years, from 2,229,408 in 2016. Although there was a slight decline from 2022 to 2023, the population has since been on the rise again.

Reference:
BPS Provinsi Sumatera Utara, “Jumlah Penduduk menurut Jenis Kelamin dan Kabupaten/Kota (Jiwa), 2022-2024” / “Luas Daerah dan Jumlah Pulau Menurut Kabupaten/Kota di Provinsi Sumatera Utara, 2023”

Regencies and Cities in Indonesia

North Sumatra Province comprises 25 regencies (Kabupaten) and 8 cities (Kota).
In Indonesia, regencies and cities hold the same administrative status; cities are not subdivisions within regencies. Instead, the 33 regencies and cities are independently subordinate to North Sumatra Province.

Climate

Although Indonesia spans a wide range east to west, it is relatively narrow north to south, resulting in minimal climatic variation across flatlands. Medan, like Jakarta, is situated in a tropical monsoon climate zone.

There are two seasons: the rainy season from around October to March, and the dry season from around April to September. However, Medan experiences relatively high rainfall and humidity even during the dry season, leading to frequent rain.

The annual average temperature in 2023 was 27.4°C, close to Indonesia’s national average. The climate is stable, with little variation in temperature between months or throughout the day.

Reference:
Tutiempo.net, “Climate Medan / Polonia Climate data 2023”

Transportation

Railways

Medan Station is the largest station in North Sumatra Province and serves as the central hub for the region’s transportation network. It functions as a terminal for long-distance trains and as the terminal station for the airport railway connecting to Kualanamu International Airport, located in the suburbs of Medan.

Long-Distance Trains

All long-distance trains operate between Medan and the eastern or central areas of North Sumatra Province. There are currently no railway routes from Medan heading north or west.
Additionally, the railway networks on Sumatra Island are independent by province, and there are no interprovincial rail lines. As a result, travel to other provinces on the island generally relies on air travel or long-distance buses.

• Sribilah Utama
  This train connects Rantauprapat in eastern North Sumatra with Medan over a distance of 266 km in approximately 5 hours and 30 minutes. There are three classes of seating available.
• Putri Deli
  This train connects the port town of Tanjungbalai in eastern North Sumatra with Medan over a distance of 175 km in approximately 4 hours and 20 minutes. All seats are economy class.
• Siantar Ekspres
  This train connects Pematangsiantar, located approximately 50 km from Lake Toba in central North Sumatra, with Medan over a distance of 129 km in around 3 hours. All seats are economy class, and there is one round-trip service per day.

Local Trains

• Srilelawangsa
  The Srilelawangsa line connects Kualanamu International Airport on the east side of Medan with Kuala Bingai Station on the west side.
• Kualanamu Airport Railink Service (Kualanamu ARS)
  The Kualanamu ARS connects Kualanamu International Airport with Medan Station in approximately 40 minutes.

Buses

• Trans Mebidang
  Trans Mebidang is an intercity bus service operated by the state-owned bus company Damri. It operates two routes connecting Medan with Deli Serdang Regency, which surrounds Medan, and Binjai City to the west.
• TransMedan (Electric Bus)
  In 2024, TransMedan took over existing bus routes within Medan City and surrounding areas, introducing an entirely electric bus fleet. It operates five routes covering a wide area from Medan’s city center to its eastern, western, northern, and southern suburbs.
• Angkot (Shared Minivan Taxis)
  Similar to other cities, Medan operates shared minivan taxis known as “Angkot.” These light van-based vehicles can access narrow roads where larger buses cannot and provide easy access to residential areas and schools, making them a familiar mode of transportation for locals. They operate along fixed routes without designated stops, allowing passengers to board or disembark anywhere along the way. In Medan, Angkot is sometimes referred to as “Sudako.”

Other Modes of Transport

In tourist areas and around markets, cycle rickshaws known as “Becak” or “Becak Dayung” are available. These vehicles are equipped with seating mounted on the front, rear, or side of a bicycle. Additionally, there are motorized becaks, called “Bentor” (a contraction of “Becak Motor”).

Access from Japan to Medan

Kualanamu International Airport is located approximately 30 km northeast of Medan, in Deli Serdang Regency. As of April 2025, there are no direct flights from Japan to Medan.

Travel from Japan to Medan requires connecting flights via Kuala Lumpur (Malaysia Airlines, etc.), Singapore (Singapore Airlines, etc.), or Jakarta (Garuda Indonesia, etc.). The total travel time typically ranges from 12 to 18 hours.

The flight from Jakarta’s Soekarno-Hatta International Airport to Kualanamu International Airport takes approximately 2 hours and 20 minutes.

Key Industries in Medan

Manufacturing Industry

One of Medan’s key industries is manufacturing, exemplified by the palm oil processing sector. Several companies manage integrated operations from oil palm plantation management to the production and export of palm oil and its derivative products, playing a significant role in the local economy. Other active sectors include rubber processing, food processing, textiles, electronics, and chemical products.

Medan Industrial Estate (Kawasan Industri Medan, KIM)

Located in the northern part of Medan, the Medan Industrial Estate (KIM) is one of the largest industrial parks on Sumatra (excluding Batam Island) in terms of both total area and the number of tenant companies. KIM consists of six areas: KIM1 and KIM2, which are managed and operated by the state-owned enterprise PT Kawasan Industri Medan, and KIM3 through KIM6, which are joint ventures with other companies. A wide variety of industries, including food, pharmaceuticals, and consumer goods, are represented, and numerous large corporations have established a presence there.

The estate offers excellent infrastructure and benefits from its proximity to highway exits, major roads, Medan’s city center, Medan Station, Belawan Port, and Kualanamu International Airport, making it a highly convenient location.

Additionally, there is a smaller industrial estate, Medan Star Industrial Estate, located to the east of Medan.

Medan Industrial Estate: https://kim.co.id/

Sei Mangkei Special Economic Zone (KEK Sei Mangkei)

Opened in 2015, Sei Mangkei Special Economic Zone is Indonesia’s first special economic zone and is located approximately 120 km east of Medan in Simalungun Regency. Covering a total area of about 2,000 hectares, its primary industries are palm oil and rubber processing. The zone also hosts tourism and logistics industries that support these sectors.

Sei Mangkei Special Economic Zone: https://seimangkeisez.com/

Trade and Logistics Industry

Medan has long been a center for trade and commerce and has been known as “the gateway of commerce on Sumatra Island.” This status remains unchanged today.

Palm oil, natural rubber, and coffee produced in North Sumatra Province are among Indonesia’s key export commodities. Medan’s Belawan Port, which recently expanded its container handling capacity, is actively engaged in trade with other Southeast Asian countries, China, Japan, the United States, and others.

Medan also serves as a regional logistics hub. The rapid growth of online shopping has increased demand for warehousing and logistics services.

Agriculture

The surrounding areas of Medan consist of fertile agricultural land, making agriculture another important industry. In addition to rice, vegetables, and fruits, this region is characterized by numerous plantations producing oil palm, natural rubber, tea, and coffee.

Tourism Industry

Medan as a Gateway to Lake Toba Tourism

Medan plays a significant role as a base for tourists visiting Lake Toba, a major tourist destination in North Sumatra Province. Most tourists tend to complete sightseeing within Medan itself in a relatively short stay.

In recent years, however, there has been a reevaluation of the city’s appeal for urban tourism, which leverages its historic buildings and the diverse streetscapes shaped by Malay, Chinese, and Indian cultures. Additionally, more tourists are visiting for culinary purposes, drawn by the city’s local cuisine and unique street food.

Medan also frequently hosts large-scale exhibitions and cultural festivals, attracting widespread interest. Notable examples include “Gelar Melayu Serumpun,” which gathers Malay communities from various countries, and “Samosir Music International” held on Samosir Island in Lake Toba.

Super-Priority Destination

The Indonesian government is promoting the “10 New Balis” program to develop new tourist destinations following Bali’s example. As part of this initiative, five domestic destinations, including Lake Toba, have been designated as Destinasi Super Prioritas (Super-Priority Destinations), focusing on development, event hosting, and attracting tourists.

According to the North Sumatra Tourism Board, visitor numbers to North Sumatra Province have been increasing since the end of the COVID-19 pandemic. Even considering only domestic tourists, the number reached 27 million in 2023, a 16.4% increase compared to the previous year. In 2024, the number of foreign tourists reached 250,000, surpassing the targeted 200,000.

References:
Pilar Merdeka, “Discover North Sumatera: The Heart of Indonesia, Kalender Event Sumatera Utara 2025 Resmi Diluncurkan”
Harian SIB.com, “Sepanjang 2024 Jumlah Wisatawan Mancanegara ke Sumut Naik 26.32%”

Service Industry

Along with the development of the tourism industry, Medan’s hospitality and food service sectors are growing. Additionally, financial services, medical services, and educational services are thriving. Some people from other provinces visit Medan specifically to access its high-quality healthcare and education.

Furthermore, office buildings and conference facilities catering to businesses operating in Medan are increasingly well-equipped. As Medan boasts the largest population on Sumatra Island and ranks fifth in Indonesia, many companies are entering the market seeking opportunities in this large consumer base, which fosters the growth of various services. Notably, Medan’s Gross Regional Domestic Product (GRDP) accounts for over 30% of North Sumatra Province’s GRDP.

Reference:
OAKtree, “Kota Medan Menjadi Peluang Besar bagi Bisnis Logistik”

Japanese Companies Operating in Medan

In Medan, Japanese automobile and motorcycle dealerships and repair shops such as Toyota, Honda, and Yamaha, as well as restaurants such as Marugame Seimen and Yoshinoya, have established outlets primarily within the city.

Additionally, there are numerous examples of Japanese companies participating in development projects or engaging in CSR activities in North Sumatra Province.

• ITOCHU Corporation, Kyushu Electric Power Co., Inc.: Sarulla Geothermal IPP Project in North Sumatra Province
• Toyo Energy Farm Co., Ltd.: 10MW Small Hydropower Project in North Sumatra Province
• AEON: Tree planting activities conducted in Medan over six years since 2014
• Otsuka Pharmaceutical Co., Ltd.: Support provided to Columbia Asia Hospital Medan; free provision of intravenous fluids for evacuees affected by the eruption of Mount Sinabung in North Sumatra Province

Considerations for Entering the Medan Market

Religion

Medan’s history as an active trading hub has attracted merchants from abroad, and laborers were gathered both domestically and internationally for plantation management. As a result, Medan has developed into a multicultural and multi-religious city.

For example, in Jakarta, Muslims account for 89.1% of the population. However, in Medan, this proportion falls below 70%, with a relatively higher presence of Christians and Buddhists. Additionally, in some areas of North Sumatra Province, Christians form the majority population, further highlighting the region’s diverse characteristics.

Medan is marked by a well-established culture of multicultural coexistence and relative tolerance toward different religions, with few issues arising from ethnic or religious conflicts. Japanese companies entering the market should understand the customs of each religion and demonstrate a reasonable level of consideration in their activities, which will help ensure smoother operations locally.

References:
BPS Provinsi DKI Jakarta, “Jumlah Penduduk Menurut Agama dan Kabupaten/Kota di Provinsi DKI Jakarta (Jiwa), 2022-2023”
BPS Provinsi Sumatera Utara, “Jumlah Umat Agama Menurut Kabupaten/Kota di Provinsi Sumatera Utara, 2022”

Wage Levels

In Indonesia, each province sets a minimum wage annually. Furthermore, within a province, regencies and cities may set their own regional minimum wages, which medium and large-sized enterprises within those jurisdictions are required to follow.

Therefore, companies considering entry into North Sumatra Province must confirm not only the provincial minimum wage but also the respective minimum wages for the regency or city where they plan to operate.

Medan has the highest minimum wage within North Sumatra Province. Following Medan is Deli Serdang Regency, which surrounds the city.

2025 Provincial and Regional Minimum Wages

• Medan City Regional Minimum Wage: IDR 4,014,072 (Approx. USD 217.70*)
• Deli Serdang Regency Regional Minimum Wage: IDR 3,732,906 (Approx. USD 202.50*)
• North Sumatra Provincial Minimum Wage: IDR 2,992,559 (Approx. USD 162.20*)
• National Average Provincial Minimum Wage: IDR 3,315,728 (Approx. USD 179.60*)

*Converted at an approximate rate of USD 1 = JPY 157 / IDR 18,440 as of April 2025.

For reference, Jakarta’s minimum wage in 2025 is IDR 5,396,761 (Approx. USD 292.50*). Minimum wages in Indonesia vary greatly depending on the region, so caution is advised.

References:
Kompas.com, “Resmi, Ini Daftar UMP 2025 di Seluruh Provinsi Indonesia”
Tempo, “UMR Medan 2025 dan Semua Kabupaten/Kota di Sumatera Utara”

Transportation Infrastructure and Traffic Congestion

Compared to major cities on Java Island, Medan’s public transportation infrastructure is still underdeveloped. As a result, it remains a car (or motorcycle)-oriented society. Although not to the extent of Jakarta, traffic congestion is also an issue. In recent years, the increasing number of vehicles has outpaced the expansion of road infrastructure.

While Medan offers advantages for logistics utilizing its airport and port, land transport infrastructure is underdeveloped. In particular, long-distance railway networks remain insufficient. When planning entry into the market, it is essential to review local traffic conditions and future infrastructure development plans.

Flooding

Like many other cities in Indonesia, Medan faces issues with flooding during the rainy season. Some areas experience flooding almost annually, making prior research indispensable.

Medan’s Cityscape and Industries Through Video

Medan’s Chinatown

Watch the Video

Kesawan is Medan’s old town area, lined with historic buildings from the Dutch colonial era. It remains popular with both locals and tourists.

This district, known as Chinatown due to its significant Chinese community, transforms into a festive scene during the Lunar New Year, adorned with lanterns and bustling with events.

Palm Oil Processing Factory

Watch the Video

This video introduces the Adolina Palm Oil Factory in Serdang Bedagai Regency, located east of Medan. This facility produces crude palm oil (CPO), which is then transported to the Sei Mangkei plant for processing into edible oil.

The factory is owned by PT Perkebunan Nusantara IV (PTPN IV / PalmCo), a sub-holding company specializing in palm oil under the state-owned holding company PT Perkebunan Nusantara III. With operations across eight provinces in Indonesia, the company engages in the production and processing of oil palm, tea, coffee, and natural rubber. It manages a total plantation area of 434,597 hectares for oil palm and operates 54 palm oil mills.

Reference:
Antara, “Komisi VII DPR RI tinjau Pabrik Kelapa Sawit Adolina Serdang Bedagai”

Medan Industrial Estate (KIM5)

Watch the Video

This video showcases the Medan Industrial Estate (KIM5).

The estate is highlighted for its flood-free environment, well-developed infrastructure including electricity, water supply, and security systems, and its convenient access to Medan’s city center, airport, and port. The presence of numerous large corporations already operating there is also noted.

Future Prospects for Medan

Medan is the largest city on Sumatra Island. With its growing population, the market is expected to expand further. In addition to the existing diverse industrial base, ongoing infrastructure development is anticipated. Although the current presence of Japanese companies remains limited, with appropriate preparation, Medan offers significant business opportunities.

For companies interested in expanding into Indonesia, please feel free to contact PT. TRICRUISE MARKETING INDONESIA.