Pelindo II and Pelindo I agree to set up a JV firm (Photo: Special)

JAKARTA (TheInsiderStories) – Indonesian state-owned port companies Pelindo I and Pelindo II have set a plan in motion to establish a joint venture company (JVC) to develop and manage ports in Indonesia. The cooperation has been concluded through their subsidiaries, PT Prima Indonesia Logistik, a subsidiary of Pelindo I and PT IPC Terminal Petikemas (IPC TPK), a subsidiary of Pelindo II.

IPC TPK, a subsidiary of Pelindo II, also known as Indonesia Port Corporation (IPC), engages in the management of terminals, facilities, and other port services in supporting the implementation of loading and unloading of goods and containers. Meanwhile, PT Prima Indonesia Logistik manages a container and logistics depot.

The new venture is aimed at expediting the development, management and operation of container terminals in Batu Ampar, Batam.

“It is expected we will add one more Container Service Facility at Indonesian Port that operates professionally and reliably, so as to strengthen our domestic and international trade connectivity network, which in turn can boost economic growth and speed up national logistics,” explained M. Aji, President Director of IPC TPK, on Friday (22/12).

Under President Joko Widodo’s administration, the development of maritime connectivity has become a main element of the national long-term development plan. Widodo once said Indonesia has to seriously start exploiting maritime resources, which he believes are the future of the country’s economy.

Indonesia’s four state-owned port operators – known as Pelindo I, Pelindo II, Pelindo III, and Pelindo IV – are tasked with much of this work and have begun courting foreign investors and the capital markets for funding. Major capacity expansion for the most strategic ports is likely to be financed either through special-purpose vehicles or on the balance sheets of the respective state-owned port company.

Opportunities for foreign companies and investors will be widespread, and investment banks are expecting a ramp-up in project finance deals as a result.

Recently, Pelindo II launched PT Pelabuhan Indonesia Investama (PII), a new subsidiary specializing in investment. PII is the first investment company in Indonesia that focuses specifically on the port business. The establishment of the company is expected to answer needs apart from managing the funding of existing subsidiaries, as well as supporting business development, capacity building, strengthening, risk management and investment.

PII is projected to form assets of Rp11.7 trillion by 2021, with Return on Equity (ROE) of 16 percent.

Meanwhile, Pelindo III will issue global bonds worth US$1 billion to fund several development projects, including the construction of the overpass to the Teluk Lamong terminal in Surabaya, the deepening of Benoa port in Denpasar, Bali, and the construction of the Gili Mas quay at Lembar port in Lombok, West Nusa Tenggara (NTB).

The company decided to raise its investment funds through bond issuance after it canceled a planned initial public offering of its subsidiary, PT Berlian Jasa Terminal Indonesia.

Written by Elisa Valenta, email: elisa.valenta@theinsiderstories.com

 

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