Pelindo II Prepares Three Subsidiaries Go IPO for Expansion

Photo by CMA CGM Group

JAKARTA (TheInsiderStories) – PT Jasa Armada Indonesia (JAI), a unit of state-owned port operator PT Pelabuhan Indonesia (Pelindo) II,  is planning to release 30 percent of its shares to the public through an Initial Public Offering (IPO) to raise Rp3 trillion (US$225.36 million). The company has put forward  three subsidiaries that will be floated on the Indonesia Stock Exchange (IDX) until 2018.

“Hopefully as scheduled in December of this year we will be listing one subsidiary, JAI, which is engaged in the field of tugboat maintenance. Proceeds will be used for the rejuvenation of ships, and for expansion of a vessel, currently some 35 feet in length,” explained President Director of Pelindo II, Elvyn G. Masassya, on Monday (4/9).

In addition to JAI, two other subsidiaries, PT Pelabuhan Tanjung Priok and  PT Indonesia Kendaraan Terminal, will conduct an IPO, most likely in 2018.

Pelindo II has prepared capital expenditure of Rp 33 trillion until 2020 for implementing strategic projects of the Company and renewing operational tools.

In detail, this year the Company has prepares a capital expenditure budget of Rp5.6 trillion, rising to Rp14 trillion in 2018, and cumulatively reaching Rp33 trillion by 2020.

“This year we will invest Rp 5.6 trillion: Rp 4 trillion for strategic project development and Rp 1.6 trillion for operational development update, such as equipment and so on,” said Masassya.

Strategic projects to be undertaken by the Company include continuation of Kalibaru Terminal Project, Kijing Harbor Project, Cikarang Bekasi Laut (CBL) Canal Project, Sorong Port, Maritime Tower, Maritime project, Port and Shipping Museum.

The current development of Phase 1 for the New Priok Container Terminal, namely, the development of CT 2 and CT 3, is still being reviewed by business partners.

The construction of the Port of Kijing in West Kalimantan will be divided into four terminals, namely, a container terminal, a multipurpose terminal, a bulk liquids terminal and a bulk terminal. The Port of Kijing is projected to accommodate a capacity of nearly 1 million TEUs of containers, 8 million tons of CPO and 15 million tons of dry bulk.

President Joko Widodo has signed Presidential Regulation No. 43 of 2017 on April 7, 2017, as the basis for the Acceleration of Development and Operation of the Port of Kijing. This will certainly support groundbreaking on the Port of Kijing, to be implemented in the second half of this year.

The CBL canal project will likely begin construction in 2017, in three stages. Pelindo II has also proposed accelerating the implementation of CBL Canal development through the issuance of a Presidential Regulation to support implementation in the field.

As for the construction of Sorong Port in West Papua, the Company is working to start Phase I of Sorong Port this year, with a projected capacity of 500,000 TEUs.

Signing of Integrated Sorong Development Agreement with other state-owned PT Pelabuhan Indonesia IV has been carried out, coordinated with the Ministry of Transportation in Preparation for Sorong Integrated Port.

In 2016, Pelindo II booked Rp 9.53 trillion in revenue. With a targeted increase of 10.75 percent, this year’s revenue is expected to reach Rp 10.56 trillion. Thus, EBITDA is targeted to increase by 14.05 percent, from Rp 3.15 trillion last year to Rp 3.59 trillion.

Masassya said that revenue performance increased as a result of the increase of import-export flows in the first quarter of 2017, tracking stronger economic conditions in Indonesia.

“Performance is rising as volume and traffic increase; as for the rise in container volume, this is a result of a recovery in the Indonesian economy, which has exerted an impact on exports and imports in the first quarter and on domestic trade flows,” he said.

President Widodo has said that the government plans to construct 24 new ports until 2019. Some of the budget will be provided from the State budget while most of it will be originated from investments.

Based on a report by the Asian Development Bank (ADB), Indonesia needs to address a shortage in infrastructure by investing as much as $1.2 trillion between 2016 to 203 in the Asia Pacific Region.

“The demand for infrastructure across Asia and the Pacific far outstrips the current supply,” ADB President Takehiko Nakao said in a statement.

Indonesia is estimated to spend around $23 billion per year at the present rate noted in the report, meaning the gap between its actual and required spending stretches as far as $51 billion, or 5.1 percent of its gross domestic product.

The government budgeted Rp 387 trillion for infrastructure spending in 2017, almost a fifth of the country’s budget. It plans to put these monies to use by constructing 10,198 meters of bridges, 13 airports, seaports in 61 locations, 710 kilometers of railways and a 836 kilometer highway that will connect several of the nation’s islands.

US$1 = Rp13,300

(Writing by Linda Silaen, Email :