Consulate General Of The Republic Of Indonesia, Hamburg - SMM 2016

Indonesian Maritime Strategy On Ports, Shipbuilding & Shippng Lines Seminar

5 September 2016 – Hamburg, Germany

Opportunities In Indonesia

Maritime Market

EDDY KURNIAWAN LOGAM Chairman of Iperindo

Opportunities in Indonesia Maritime Market | IPERINDO

TOPICS

• Indonesia’s Snapshot

• Cabotage Principle (2005)

• Shipping Industry Post Cabotage Law

• Shipbuilding Industry Profile

• Shipbuilding Industry’s Challenges & Key Issues

• New Maritime Era Under President Jokowi

• Huge Opportunity

• IPERINDO in Brief

IPERINDO = Ikatan Perusahaan Industri Kapal dan Lepas Pantai Indonesia

or Indonesia Shipbuilding and Offshore Industries Association

01

Opportunities in Indonesia Maritime Market | IPERINDO

INDONESIA’S SNAPSHOT • The largest archipelago country : + 17.500 islands, + 81.000 km shoreline

(14% of the world shoreline), 2/3 sea area

Land area = 1.910.931,32 km² (Kemendagri, Mei 2010); Sea area = 3.544.743,9 km²

(UNCLOS 1982) consists of : territorial area = 284.210,90 km², EEZ = 2.981.211,00

km², 12 mile area = 279.322,00 km²

• Capital : Jakarta

• Currency : Indonesian Rupiah

• Nominal GDP : $895 billion USD (IMF, 2015)

• GDP per capita : $3,415 USD at Current Prices (IMF, 2015)

• GDP growth : 4.7% (2015)

• Population : 255 million (estimated, 2015)

• Productive populations : 66.5% (age 15-64)

• Rich & abundant natural resources

• Projected to become the 10th largest economy in Y2020 – GDP US$3,2 T

(Stanchart)

02

Opportunities in Indonesia Maritime Market | IPERINDO

CABOTAGE PRINCIPLES (2005)

Cabotage Principle was initiated in 2005 when the domestic shipping

industry in Indonesia almost collapsed as a result of foreign vessels

engaging in coastwise transportation.

The initiative was then reinforced by the introduction of the Maritime Law No.

17 of 2008 which was aimed at providing business opportunities and

greater market share to Indonesian companies.

Article 8 of the Maritime Law No. 17 of 2008 sets out the following

principles:

• That activities relating to domestic sea transportation must be performed

by an Indonesian Sea transportation company using an Indonesian

flagged vessel which are manned by Indonesian crews; and

• Non-Indonesian sea flagged vessels are prohibited from carrying

passengers and or goods between island or ports in Indonesian waters.

03

Opportunities in Indonesia Maritime Market | IPERINDO

SHIPPING INDUSTRY AFTER CABOTAGE LAW

0

2000000

4000000

6000000

8000000

10000000

12000000

2005 2012

Yard’s Installed Capacity

Repair New Build

0

2000

4000

6000

8000

10000

12000

2005 2012

Number Of Vessels

# of Vessel

Vessels’ Age

Distribution

App 90% of # of vessels’

increase was imported and

second hand older tonnage

04

Opportunities in Indonesia Maritime Market | IPERINDO

SHIPBUILDING INDUSTRY PROFILE

Shipyards • + 250 companies

Installed

Capacity

• New shipbuilding 0,9 Mn DWT/yr

• Repair & maintenance 12 Mn DWT/ yr

Facility

Capacity

• New shipbuilding up to 50.000 DWT

• Repair & maintenance up to 150.000 DWT

(Graving Dock)

Industry

Capability

• To build up to 1,500 DWT ± 80% of total yard

• To build > 10,000 DWT 6 yards

05

Opportunities in Indonesia Maritime Market | IPERINDO

LOCAL YARDS’ CHALLENGES & KEY ISSUES

• Unfavorable Fiscal & Tax Policy on the shipbuilding industry (Import Duty,

Corporate Income Tax)

• Lack of financing support (investment & working capital) from banking

industry (collateral requirement and high interest rate)

• Equipment's, parts and raw materials are mostly (app 70%) imported

• Limited production capacity

• Production management and ship design can be improved

06

Opportunities in Indonesia Maritime Market | IPERINDO

NEW MARITIME ERA UNDER PRESIDENT JOKOWI (1)

• President Jokowi has declared his vision to make Indonesia the World’s

Maritime Axis and outlined an ambitious maritime doctrine to boost

economic growth by improving connectivity between the islands of the

Indonesian archipelago.

• Government has decided that all government and state-owned companies’

vessels procurement have to be built locally

• Government has proven its commitment by purchasing vessels to local

shipyards

Sea Comm – total 188 vessels : 73 patrol boats, 95 passenger 1.200 & 2.000

GT vessels, & 15 navigation vessels, Rp. 11.8 T eqv US$ 875 Mio

Fishery Ministry – Y2016 target 3.540 various sizes (<5, 5, 10, 20 & 30 GT) of

fishing vessels, Rp. 4 T eqv US$ 295 Mio; Y2016-2019 target 16.000 vessels

worth Rp. 16 T eqv US$ 1,185 Mio

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Opportunities in Indonesia Maritime Market | IPERINDO

NEW MARITIME ERA UNDER PRESIDENT JOKOWI (2)

• Government has exempted Value Added

Tax (10%) last year

• Government has issued business licenses to

11 companies to operate bonded logistics

warehouses in the beginning of Y2016

• Government has opened the opportunity to

private sector to invest and operate sea

ports

Note :

IPERINDO is lobbying the Government to

exempt the Import Duty as well

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Opportunities in Indonesia Maritime Market | IPERINDO

HUGE OPPORTUNITY (1)

• The development of large-scale shipyards to build larger size and more

complex vessels

Few existing large shipyards

Lower land price

Trainable labor at lower cost

• The development of premium repair & maintenance yards

Docking for most of medium-large vessels has to be done overseas

Long waiting period to get docking space

Most of foreign equipment makers do not have local warehouse

• The production of equipment's, parts and raw material locally

Most of winches, anchors, valves etc. are still imported

• The production management and ship design services

Proven design will help to accelerate and improve future ship building

09

Opportunities in Indonesia Maritime Market | IPERINDO

HUGE OPPORTUNITY (2)

• The development of recycling

business due to rejuvenation

of old vessels (30% >20

years)

• Shifting from oil to gas will

trigger LNG-related

businesses from processing

(FRSU/FSU), transportation

(small-medium LNG carriers),

storage (LNG tank farms),

etc.

10

Opportunities in Indonesia Maritime Market | IPERINDO

IPERINDO IN BRIEF

Established : 11 March 1968

Purpose : To support and develop shipbuilding & offshore industries as

well as its supporting industries

Function : - Consolidate ideas of its members for industry’s growth

- Advocate and represent members to meet the Government’s

officials and other important stakeholders

Members : 142 Companies

• 94 shipbuilding companies

• 1 offshore company

• 39 supporting industries

• 4 classification companies

• 4 consulting companies

IPERINDO

Ikatan Perusahaan Industri Kapal dan Lepas Pantai Indonesia

(Indonesia Shipbuilding and Offshore Industries Association)

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Opportunities in Indonesia Maritime Market | IPERINDO

SHIPYARD’S DISTRIBUTION RIAU/ KEP. RIAU

PT. Citra Shipyard

PT. Bandar Abadi

PT. Multi Ocean Shipyard

PT. Batam Expresindo Shipyard

PT. Marinatama Gemanusa

PT. Palindo Marine

PT. ASL Shipyard

PT. Patria Maritim Perkasa

PT. Cahaya Samudera Shipyard

PT. Palma Progress Shipyard

PT. Bandar Victory Shipyard

PT. Idros Service

PT. Llthabi Mandiri Teknik

KALIMANTAN

PT. Muji Rahayu Shipyard

PT. Kukar Mandiri Shipyard

PT. Galangan Balikpapan Utama

PT. H & H Utama Internasional

SULAWESI

PT. Industri Kapal Indonesia

PT. Unggul Sejati Abadi

PT. Sarana Samudera Pacific

PT. Bitung Sarana Mulia

CV. Sarana Marine Fiberglass

PAPUA

PT. Dakindo Aimas Papua

PT. Skyline Kurnia

SUMATERA

PT. Noahtu Shipyard

PT. Marine Mandiri Shipping Line

PT. Pahala Harapan Lestari

PT. WarunaNusa Sentana

PT. Dok & Perkapalan Air Kantung

PT. Lampung Andalas Shipbuilding & Engineering

PT. Mariana Bahagia

PT. Intan Sengkuyit

BANTEN

PT. Samudera Marine Indonesia

PT. Saturn Manunggal Abadi

PT. Krakatau Shipyard

PT. Krakatau Steel (Persero)

PT. Krakatau Posco

JAKARTA

PT. Dok & Perkapalan Kodja Bahari

PT. Union Yard

PT. Janata Marina Indah

PT. Daya Radar Utama

PT. Perkapalan Nusantara (Persero)

PT. Dukuh Raya Dockyard

PT. Bayu Bahari Sentosa

PT. PUSKOPELRA

PT. Dok Duasatu Nusantara

PT. Caputra Mitra Sejati

PT. Steadfast Marine

PT. Hamdok Argokaravi Raya

PT. Mutiara Fibrindo

PT. Merpati Marine Service

PT. Tesco Indomaritim

PT. Fibrite Fibreglass

PT. Kawi Eka Karya

PT. Pengerukan Indonesia (Persero)

PT. Adiguna Shipbuilding & Engineering

PT. Gunanusa Utama Fabricators

PT. Indonesia Magma Chain

PT. Palka Sarana Utama

PT. Antesanu Bahari Utama

PT. Aneka Sarana Konstrindo

PT. Multico Millenium Persada

PT. Pivotel Amalgam Indonesia

PT. Metalock (Indonesia)

PT. Wechai Singapore Pte Ltd – Indonesia Branch

PT. Kresna Adikarsa

PT. Dunia Marine Internusa

PT. Reka Pola Bahari

PT. Rachsa Putra

PT. Omega Marine

PT. Biro Klasifikasi Indonesia

PT. Nipon KaijiKyokai Indonesia

JAWA TIMUR

PT. Dok & Perkapalan Surabaya

PT. Dumas Tanjung Perak Shipyard

PT. PAL Indonesia

PT. Najatim Dockyard

PT. Dewa Ruci Agung

PT. Adiluhung Saranasegara Indonesia

PT. Duta Marina Shipyard

PT. Marulin Maju Utama

PT. Tambangan Raya Permai

PT. Galangan Surya Pelni

PT. F1 Perkasa

PT. Indonesia Marina Shipyard

PT. Samudera Indoraya Perkasa

PT. Bintang Timur Samudera

PT. Sumber Logam Nusantara

PT. Banyuwangi Perkasa

PT. Dok Pantai Lamongan

PT. Tri Ratna Diesel Indonesia

PT. Tirta Wiguna Agung

PT. Arum Samudera

PT. Dodo Sakti

PT. Mitra Pal

PT. Palindojaya Utama

PT. Teknik Tadakara Sejati

PT. Tirtasari Permai

PT. Gunawan Dianjaya Steel

CV. DeReconstruction

PT. Pantheon Energie

PT. Marinav

PT. Avenir

JAWA BARAT

PT. Dok bahari Nusantara

PT. Patria Martime Industry

PT. Gunung Raja Paksi

PT. Samudera Luas Paramacitra

PT. Hamson Indonesia

PT. Pindad (Persero)

PT. Hempelindo JAWA TENGAH

PT. Tegal Shipyard Utama

PT. Sanur Marindo Shipyard

PT. Ben Santosa

PT. Yasa Wahana Tirta Samudera

NUSA TENGGARA/ MALUKU

PT. Wahana Putra Marindo

CV. Wahana Fiberglass

PT. Waiame

PT. Mitra Kieraha Prima

Sumber: Directori IPERINDO 2015 - 2016

+ 250 Shipyards

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WELCOME TO INDONESIA

We welcome and support you to invest and

expand in Indonesia and participate in

building Indonesia to become the

World’s Maritime Axes

Thank you