Surabaya (TheInsiderStories) – Two international companies, Singapore’s PSA International Pte. Ltd., and PT China Communications Construction Engineering Indonesia (CCCEI) joined with state-owned port operator PT Pelabuhan Indonesia III or Pelindo III declared to develop Kendal International Port in Central Java.
The cooperation outlined in the memorandum of cooperation (MoC) was signed by the Pelindo III’s CEO Ari Askhara, President Director of CCCEO Fan Fiyeng, and Head of the PSA Seow Hwee in Jakarta (06/06).
Askhara said all parties come together to discuss the possibility of establishing a joint venture to carry out the project development of the Port of Kendal which requires an investment of Rp4 trillion (US$287.77 million) for infrastructure and superstructure.
Developing Kendal port is initiated with the Government of Kendal to support the logistic flow of goods in Central Java province at a time in order to anticipate and accommodate the Container Terminal services Semarang projected in 2021 exceeded its capacity.
“The Port of Kendal will be an attractive feature for investors to invest in the Kendal Industrial Area, which is being built by the government,” said Askhara.
Recently Pelindo III has successfully raised $500 million from selling global bonds, which proceeds will be used to help fund several projects under development. According to him, some of the proceeds will go to fund development of ports in Benoa, Bali and Mataram on the island of Lombok.
The state owned port operator will also use some to help finance a project to build an overpass road, a container terminal in Lamong Bay and toll roads nearby the terminal in West Java. The company to spent Rp4.68 trillion to develop its terminals and ports.
There are also some parts of the proceeds that will go to finance the company’s capital expenditures, which is set Rp7.25 trillion. In addition, the state-owned company will also use the proceeds to refinance Rp 4.39 trillion worth of debt and fund other corporate actions, including to buy shares of private companies.
The company’s investment is allocated for a number of strategic programs, including for construction of the first phase of development of West Kalibaru Terminal, a revitalization program on the flow and the beautification of facilities at Benoa Port, and construction of Cruise Terminals and Containers at Gilimas Lombok. There are also a project to construct flyovers and tapper of the Outer Ring Road West (JLLB) Lamong Bay terminal.
International rating agency Moody’s gives Baa3 with a stable outlook, while fellow global rating assessor Fitch gave BBB- with a stable outlook for the company’s corporate ratings. The ratings are based on a number of company performance indicators that show a positive outlook.
In 2017, the company posted a record profit of Rp 2.04 trillion, which is an increased of 35 percent compared to 2016. Another positive performance is the company expects a higher ship visits from ports it operates, it also sees higher flow of goods and containers, as well as passengers throughout 2017.
Pelindo III is engaged in port services. The company manages 43 ports in seven provinces, namely East Java, Central Java, South Kalimantan, Central Kalimantan, Bali, West Nusa Tenggara and East Nusa Tenggara. It controls 23 subsidiaries and affiliates.
Pelindo III’s core business is in the port service industry, which is vital for the continuity and smoothness of sea freight in Indonesia.