PT Industri Kereta Api (INKA) and Malaysian based firm, Perencana Dingin SDN BHD, signs US$1 million license agreement for technical support and local manufacturing of rolling stock air conditioner system - Photo: InsiderStories.

JAKARTA (TheInsiderStories) – Indonesian state-owned rolling stock manufacturer PT Industri Kereta Api (INKA) and Malaysian based firm, Perencana Dingin SDN BHD, signs US$1 million license agreement for technical support and local manufacturing of rolling stock air conditioner (AC) system in Jakarta on Monday (08/26). Perencana Dingin acquired a license to produce INKA refrigeration units in Kuala Lumpur under the DINGIN-INKA AC brand.

INKA’ president director, Budi Noviantoro said, this collaboration showed that the company and the country were committed to accelerating business development that benefits the railroad industry in the Southeast Asian region. Currently, the two countries are aggressively building rail-based infrastructure.

“The point is that we are working together to enter the Asean market together with the Perencana Dingin. So there are stages. Because INKA already has an asset factory there. If it is made in Indonesia, it’s certain to send costs. So we make it in Malaysia, then we enter the Southeast Asian market. Then we will go together to produce goods there,” Noviantoro said.

Meanwhile, Perencana Dingin’ business director Azwan Omar, said that the licensing agreement was the first time for the two countries. It also shows the commitment of the company and INKA to the railroad industry.

“Through the signing of this agreement, Perencana Dingin will establish the first manufacturing center in Malaysia for the rolling stock refrigeration unit,” he said.

He added, so far both countries have also operated trains for a long time, both within cities and between provinces. Therefore exchanging information about the experience of building, operating and maintaining a railroad system will be very valuable for both countries.

“This is a milestone from both countries as a step for us to advance the railroad industry. Through this collaboration, it is hoped that there will be more collaborations that will benefit both countries,” he said.

Perencana Dingin SDN BHD is a Malaysian company that focuses on providing rolling stock refrigeration units. These services include manufacturing, maintenance, repair, and storage. While INKA is the first company to produce integrated rolling stock coolers in Southeast Asia.

Three months ago the company joined with a number of state own enterprises (SOEs) conduct business cooperation in various fields ranging from railroad infrastructure, mining, to agriculture. The SOEs consortium Indonesia Railway Development Consortium (IRDC) consisting of INKA, PT LEN Industri, PT Kereta Api Indonesia, and PT Waskita Karya Tbk (IDX: WSKT) signed an agreement with Phonsavanh Group to support Laos government projects to build Petrotrade and Phaiboun Import Export Trading.

The companies agreed to explore cooperation with Phonsavanh in the field of railroad development from Thakek in Laos to Vung Ang Port in Vietnam. IDRC will build a 195-kilometer train line from Laos to the port area in Vietnam. The Rp9 trillion ($634 million) project will support Indonesia’ coal exports to Laos and import potassium to Indonesia.

In the train business, recently, the Philippines has ordered six sets of trains rail diesel type with total price Rp1.48 Trillion. The company said the train purchases had been agreed and would be sent to the Philippines in mid-July.

INKA says it wants to strengthen its foothold in Southeast Asia by participating in the many railway mega projects in Thailand and other countries. The company itself has a target to be able to control the carrier market in Southeast Asia in 2020.

Last year, INKA joined with Thanakorn Co. Ltd and the State Railway of Thailand set up a joint venture company (JVC) INKA Thailand Co, to handle Thai government’ mega projects seven double-track railways spanning 933 kilometers worth a combined 113.66 billion baht ($3.63 billion).

Thanakorn owns a 59 percent stake in the JVC, while INKA holds the remaining shares. Chief executive of Thanakorn, Thananot Thunyaphongphaiboon said the partnership also covers both parties’ presence in Laos, Cambodia, Vietnam, and Myanmar. While, Noviantoro, said that the cooperation between the two parties in the form of 150 locomotives delivery.

Recently, to support the export market, INKA immediately realized the construction of its second plant in Banyuwangi, East Java with an investment of Rp600 billion. The main factory of the manufacturer in Madiun, also in east Java.

As Southeast Asian Nations are marching toward integration of their economies through the ASEAN Economic Community, a lot of the companies set up a collaboration to realize the program. In the past seven years or so, ASEAN Exchanges have taken a number of initiatives as a joint asset class for retail and global institutional investors.

US$1=Rp14.200

Written by Lexy Nantu, Email: lexy@theinsiderstories.com