Maritime to Indonesia
Trends and opportunities
With a coastline of nearly 95,000 km, Indonesia has ambitions to fulfil its
vision as a maritime power. Maritime infrastructure has been a distinctive
focus of President Joko Widodo’s plans to develop infrastructure and
livelihoods in Indonesia to make it not only more competitive within ASEAN
but also globally. Widodo is seeking to improve ports, maximize
inter-island connectivity, and turn Indonesia into a “Global Maritime
The government is also aiming to rebuild Indonesia’s maritime culture and
increase its naval assets – resulting from an increase of the military
budget from less than 1 per cent to 1.5 per cent. It is also aiming to
significantly upgrade Indonesia’s ports and other shipping infrastructure,
so that the country can become more integrated in trade between the Indian
and the Pacific oceans. This will in turn improve logistics and enable
Indonesia to better take advantage of its archipelagic nature.
President Joko Widodo’s Sea Toll Road initiative, worth an estimated US
$429 billion, is focused on the development of 24 commercial ports and
more than 1,000 non-commercial ports. There are opportunities for
Australian business to build and/or manage these ports and to assist with
technological overlays to ensure these ports operate efficiently.
Also, Indonesia aims to become a regional shipbuilding hub and President
Widodo is committed to the development of the local industry and stated
all ‘state-owned vessels’ (including for military and use in the oil and
gas sector) will be made domestically. Opportunities exist for Australian
businesses who can find a local partner and are committed to investing in
the local area to develop its workforce.
The Ministry of Industry of Indonesia boasts experience in building new
ships, with an internationally recognised style and size including the bulk
carrier 50.000DWT (exported to Germany, Turkey and Italy) ferry
ro-ro19.000GT (exported to Sweden) chemical tanker(s/d6.200DWT), Landing
Platform Dock, LPG Carriers 5.600CuM, research vessels, dry cargo vessels
18.500DWT (exported to England and the Netherlands) passenger ships with
capacity for 500 people, general cargo and container vessels, container
ships/d1.600TEUS, oil tankers/d30.000DWT, fishing vessels 300GT, fast
patrol boats 57m and 28m, tug boats 7.500HP and Anchor Handling Tug
There are approximately 35 major shipyards in Indonesia, some of which are
already in cooperation with foreign partners. Apart from these, there are
up to 200 shipyards for repair and maintenance located widely across
Indonesia, with half of them located in Riau Islands due to the region’s
fiscal incentives (IPERINDO, 2015). Most yards in Indonesia are not
equipped to build vessels over 20,000 deadweight tonnes, unlike their much
bigger rivals in China, Japan or South Korea. Although the regulatory
environment dictates that shipbuilding will remain dominated by local
interests, partnerships have proven effective win-wins previously and there
are also opportunities in the passenger vessel space for companies able to
supply at the right price and companies who have capability in the
aforementioned vessel types.
In Indonesia, the productivity of most national shipyards is below 500
deadweight tonnage, which is still relatively low compared to other Asian
countries. Constraints faced by the shipbuilding industry include a strong
reliance on imported raw materials (about 65 per cent) and an inability to
maintain and repair boats in a timely manner.
Ports and Tourism
Indonesia’s nascent cruising industry is oft mentioned as a driver for
Indonesia’s tourism growth and many opportunities exist in this sector,
including the development and management of Indonesia’s natural beauty and
touring routes, consultancy related to cruising activities and the sale of
vessels into Indonesia for a rapidly developing wealthy class. At present,
these are several major marinas in Indonesia; Marina Del Ray Lombok Gili
Gede Indonesia; Lombok,
Nongsa Point Marina & Resort
Medana Bay Marina
Pantai Mutiara Marina
Jakarta and; Bali Benoa. Benoa Harbour in Bali is the most popular port of
call for cruising yachts.
However, infrastructure development is required initially and Pelindo
Properti Indonesia, a subsidiary of Indonesia Port Corporation III, a state
owned port operator, with the support of Indonesian Ministry of Tourism
took the initiative to start mapping out new marina developments. Pelindo
plans to develop lifestyle Marina’s, such as Boom Marina in Banyuwangi
which will aid the development of this sector and provide opportunities in
marina management and opportunities for investment in commercial
real-estate developments, retail activities and the hospitality sector.
Future prospects 2015 -2025
Indonesia plans to increase the national shipping industry ability from
85,000 DWT (2015) to 300,000 DWT (world class industry) by 2025. It is also
forecast that Indonesian maritime players will continue to improve their
capabilities and build more specific class of ships including the Korvet,
Frigate, Cruise Ship, LPG Carrier, and LNG Carrier. Indonesia is aiming to
grow its knowledge and better its national design capability through its
domestic ship engineering companies. Opportunities exist for Australian
companies who have capability in naval architecture design and development
and are interested in technology transfer and partnership arrangements for
The Indonesian government aims to grow the maritime-based economy, and one
of the major industries is shipbuilding. The shipbuilding industry has good
prospects along with the increasing demand for mass transportation and
logistics in Indonesia amid rapid economic growth in Indonesia. Vessels are
a core element in large industries including in mining, fisheries, tourism,
as well as defence. Defence in particular is one the most high potential
sub-sectors considering Indonesia is currently very active in combating
illegal fishing and wishes to improve its maritime power. Some areas of
opportunity include patrol vessels, interceptors, warships, and submarines.
According to IPERINDO (2015), government tenders for larger ships,
especially those over 50,000 dwt, remain open to foreign shipbuilders. The
Indonesian Shipbuilders' Association has stated that they aim to work with
the government and local industry players to boost the average local
content to 50 per cent within the next five years. To achieve that target,
Indonesia would need to build up a marine logistics supply chain, partly to
ensure after-sales support for local-built vessels. This involves
replicating the success of the Batam bonded zone in other strategic choke
points of the archipelagic nation. Goods entering bonded zones in Indonesia
are exempt from import tax, luxury goods tax and value-added tax.
Currently, 80 per cent of the world's ships are built in Asia. With the
shift in ship production away from Europe to Asia, Indonesia will
potentially be one of the suppliers to meet global demand in the future.
With the new sea toll program and tourism sector development, there is an
increasing demand for ships to meet the demands of the domestic market –
both new ships as well as those replacing the old.
Tariffs, regulations and customs
Presidential Instruction (Inpres) No. 5/2005 about Shipping Industry
Empowerment, with cabotage law stated on the Inpres. Cabotage law
implementation is strengthened by the inclusion of the principle to Law No.
17/2008 about shipping. Cabotage law is a domestic shipping activity
conducted by national shippers using Indonesian-flagged vessels manned by
Indonesian crews. The implementation of this law aims to protect national
sovereignty, to support the realisation of Archipelagic Outlook, and to
provide business opportunities to national shippers (Nusantara Maritime
Marketing your products and services
In general, to successfully market to Indonesia’s maritime industry, you
may wish to consider:
participating in major local aviation trade exhibitions
highlighting your international track record to customers
engaging a local distributor (crucial to effective business
visiting the market on a regular basis and investing time (relationship
consider opening a representative office or presence
engaging Austrade in tailored services to help you identify
opportunities or connect you with key distributors and buyers.
Representative office set up application is conducted through the
Indonesian Investment Coordinating Board or BKPM and for your direct line
of business you can contact the Ministry of Trade. Clarity around business
purpose is important particularly for registration and tax purposes.
Austrade can refer you to local notaries or service providers who can
advise in these areas.
Based on our close interaction with Indonesian customers, Austrade notes
that some Indonesian companies would prefer to cooperate with foreign
companies that have local representative offices or distributors based in
the market. This increases their confidence when engaging with foreign
partners in terms of after sales service.
Indonesia’s maritime industry is concentrated in Java, Riau Islands, and
Makassar. For distribution of components and parts, Austrade can assist in
connecting companies to Tier 1 and Tier 2 suppliers in market.
Links and industry contacts
The Investment Coordinating Board
Indonesia Shipbuilding and Offshore Association
Kementerian Koorinator Bidang Kemaritiman Republik Indonesia
Kementerian Perhubungan Republic Indonesia
Ministry of Marine Affairs and Fisheries Republic of Indonesia
Pelindo Properti Indonesia
PT. Dumas Tanjung Perak Shipyards
PT Industri Kapal Indonesia (Persero)
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