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Indonesia's Shipping Industry Attracting Investments from Around the Globe

Indonesia is gradually becoming a hub for investments as Japan, South Korea, China, and Australia have expressed their interest to invest in the shipping sector of the country. Indonesian Investment Coordinating Board (BKPM) has revealed that the four countries have proposed to invest a total of $9.34 billion. The board is now assisting the countries to identify their investment opportunities in the sector and focusing on the integration of licensing for local industries as well as simplified investment licensing in the shipbuilding sector. It will also work towards providing human resource to the countries for their investments.

The Indonesian Investment Coordinating Board (BKPM) revealed that between October 2014 and May 2015 period, Japan, South Korea, China, and Australia have expressed keen interest to invest in Indonesias shipping sector.
“Between October 2014 and May 2015, we have received five investment proposals from four countries: Japan, South Korea, China, and Australia, with a total investment amounting to US$9.34 billion,” BKPM Head Franky Sibarani stated.
Franky specifically mentioned that a Japanese company is interested to invest US$40 million; two South Korean companies, one of which gave an investment commitment of US$4 billion; a Chinese company, with an investment of US$5.15 billion; and an Australian company, with an investment of US$150 million.
“A Korean shipping line company is exploring investment opportunities in the area of ship maintenance,” Franky noted.
The board also provides help to the investors to identify their investment sites.
Therefore, the board has offered several locations such as Lampung, Lamongan, Gresik, Bitung, and South Sulawesi that have dense shipping lanes and offer adequate facilities.
Franky hopes that this year, the investment process would enter the finalization stage.
The BKPM has initiated several steps to encourage development of the shipbuilding industry that focuses on attracting investment in the sector.
“This also includes the investment market in the shipping sector that is integrated with the components,” Franky remarked.
The board will also focus on the integration of licensing for local industries such as shipbuilding in Lamongan and Tanggamus Lampung as well as simplified investment licensing in the shipbuilding sector.
Furthermore, the board will work with the relevant ministries and institutions for providing ready-to-work human resources.
“We will also encourage the domestic shipbuilding companies to build vessels by using 60 percent to 70 percent domestic components that can help to boost the domestic shipping component industry,” Franky stated.
The current production capacity utilization only reaches 40 percent per year for the construction of a new nine hundred thousand deadweight tonnage (DWT) vessel.
Meanwhile, the utilization for 1.2 million DWT ship repair capacity per year is still 85 percent.
Currently, 43 percent of Indonesias shipping industries are still concentrated in Java and 39 percent in Batam.
(Source: Antara News)

Indonesian Investment Coordinating Board (BKPM)