JAKARTA (TheInsiderStories) – As state-owned port operators are no longer limited in carrying out expansions by region, PT Pelabuhan Indonesia (Pelindo) II or Indonesian Port Company (IPC) plans to enlarge its business across the archipelago.
Elvyn Masassya, 47, started his career in 1990 as a credit analyst at state lender PT Bank Negara Indonesia Tbk (IDX: BBNI), progressing up the ladder through a number of other banks, including the now-defunct Bank Sinar Harapan Bali and Bank Permata, before returning to BNI.
He is also a musician, columnist, and economist, and worked for state-owned petrochemical company Tuban Petrochemical Industries in 2008, before being appointed Investment Director at Jamsostek.
Having successfully improved the fund’s investment return, Masassya, who was born in Medan, rose to the top job and currently takes the wheel to lead the largest seaport operator in the country.
Pelindo II has plans to list two of its subsidiary in this year to raise around Rp4 trillion from the capital market. The company also eyes shares of Patimban Port projects joined with other investors.
The Ministry of State-Owned Enterprises (SOEs) has put in motion a plan to establish a parent company or holding body in 2018, for ports, ships and industrial estates. The establishment of a maritime holding organ for SOEs is considered necessary to cut the cost of logistics in Indonesia while imposing closer regulations on inter-port, shipping and industrial areas.
In preparation, on March 10, 2017, the Ministry issued decree number 48/MBU/03/2017 on the establishment of a Project Management Office (PMO) Maritime Sector Holding. This Holding will involve four state-owned Indonesian port operators, namely, Pelindo I, II, III and IV, PT Pelayaran Nasional Indonesia, PT Bahtera Adhiguna, PT Djakarta Lloyd, PT ASDP Ferry Indonesia, PT Varuna Tirta Prakasya, PT Bhanda Ghara Reksa, PT PAL, PT Industri Kapal Indonesia, PT Dok Perkapalan Surabaya, and PT Dok Kodja Bahari.
The formation of a holding structure is useful for the synergy in developing strategic and investment plans, asset utilization, service and operations, capacity building and efficiency, since it benefits from economies of scale and competitiveness.
Currently, the four state-owned seaports operate in accordance with the division of work area. Pelindo I operates in western Indonesia, Pelindo II or IPC operates in parts of Sumatra, West Kalimantan, Banten, Jakarta, and West Java.
Here’s the detail interview with Massasya :
Q: How is the progress of establishing the maritime holding organ?
A: We start from an alliance of subsidiaries. For the first stage, if we determine a similar business activity then we will merge them. The next step is for the Ministry of State-Owned Enterprises (SOEs) authority. We already set a timeline with other Pelindos. We expect the first stage will be done in 2018.
Q: What is the benefit of the holding for the company itself?
A: Currently, the four state-owned seaports operate in accordance with a division of work area. The scope of business is currently limited to each of Pelindo’s areas. Thus, with the realization of a holding, the scope of business will cover the entire nation.
Q: Will the parent companies also be merged?
A: At the parent level, wholly on the authority of shareholders. Remember, there must be standardization – we set it up first. Meanwhile, we must also be prepared in other Pelindo units.
Q: Pelindo II’s subsidiary PT Jasa Armada Indonesia just performed an (IPO) last year. Will any other subsidiary follow?
A: We expect our subsidiary PT Indonesia Kendaraan Terminal (an inter-port transportation company) will follow this first semester; however, we have yet to appoint the underwriter. But we assure stakeholders that the process is ongoing. Meanwhile, for the second semester, we are reviewing PT Pelabuhan Tanjung Priok, to determine whether it’s on for this year or not.
Q: What about Pelindo II’s port development plans?
A: In the future, Tanjung Priok Port and other seaports will be fully digitalized. There will be no more physical documents, as they will be completely replaced by electronic ones – no more cash transactions as we will totally rely on banking services. Moreover, by setting up a real-time shipping administration, all Pelindo (I, II, III & IV) will be integrated.
Q: What about the progress of Patimban Port development? Are you still expecting to be involved as the operator of Patimban Port (in Subang, West Java), with a majority share or at least a larger share than that of national private companies?
A: We are already interested in becoming an operator. We will wait for a decision from The Ministry of Transportation. In our letter of interest, we propose a maximum of 51 per cent. Discussions are ongoing – not yet finalized. If our 51 per cent interest is still possible – well, if below that, we follow.
The government has the full authority to determine the role of Pelindo II in Patimban. However, the state-owned enterprise (SOE) is ready to be given greater responsibility to contribute to the port.
Q: What is Pelindo II’s target this year?
A: Tanjung Priok Port is now a hub and we aim to make it a trans-shipment port. We are trying to apply a cargo consolidation concept under which cargoes from Indonesian regions transit in Priok instead of Singapore.
To bolster activities in the port, we are implementing a standardized model which we call a “chain port.”
We will focus on seven out of 24 ports across Indonesia and attempt to standardize their depth, services and equipment.
Q: How much the capital expenditure for this year?
A: Rp11.4 trillion (US$857 million) where mostly will come from internal cash, and we have no intention to issue bond this year.
Written by Elisa Valenta, Email: email@example.com