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27 July 2020

Pelindo II has not yet expanded overseas, this is the reason

KONTAN.CO.ID - JAKARTA. PT Pelabuhan Indonesia II (Pelindo) or Indonesia Port Corporation (IPC) has delayed the planned expansion of overseas port acquisitions. This is done along with the risk of global recession due to the Covid-19 virus pandemic. Instead, Pelindo II will focus on domestic development to increase the passion of the national economy.

Pelindo II President Director Arif Suhartono said Covid-19 gave lessons for the company and revised its business strategy, especially in terms of port expansion abroad.

"There are several ports that we aim at such as Vietnam and Bangladesh, it looks like they have also been hit quite heavily, surely we will review them again," Arif explained to Kontan.co.id, Saturday (25/7).

Thus, the focus is now more on domestic development to increase the passion of the national economy. He also must make adjustments related to the existing situation. "We are trying to maximize the domestic side of other ports, building collaboration in the eastern region at the national benefit," he said.

As is known, in the first half of 2020, Pelindo II continued to expand the construction of a new terminal, the Kijing Terminal, where the development progress has now reached more than 70%. "We plan to start soft-launching immediately and start operating in the third quarter of 2020," explained Arif.

In Semester II, Pelindo II will focus on continuing the completion of the ongoing project, namely the construction of the Beijing Terminal. Investment in the Development of Kijing Terminal The initial phase up to the first semester of 2020 has absorbed approximately Rp 2.37 trillion which is used for land acquisition, the physical construction of the terminal, and the costs of other supporting facilities construction activities.

Arif explained the cost of constructing the first phase of the Kijing Terminal was budgeted at Rp 5 trillion. Another focus is to continue the construction of the New Priok Terminal, namely Container Terminals 2 and 3 which will restart in the third quarter.

Arif said, the warehousing business also has global potential because there are a lot of production activities but there is little demand so it requires storage.

"There are imported containers, the goods have been removed, the containers are returned to the shipping line, the goods are put in a warehouse, there is a little business model changed, the factory will not be stored directly in the warehouse," he explained.

It also sees business opportunities that arise when a pandemic occurs. Lockdown policies in various countries also have an impact on the availability of port equipment spare parts which so far have been fulfilled imports from producing countries.

"Departing from this, one of the ideas that we are initiating is to domestically need port equipment maintenance. Spare parts (such as reach stacker tires, tire cranes, dynamos, gearboxes, etc.) that had to be imported, will try to be supplied from within the country by cooperating with local producers who can meet these needs, "said Arif.

He gave an example of purchasing tires in the domestic industry only making small sizes, while the needs are large and no one is producing, so they must import. "With a large scale of production, the domestic rubber industry is already committed to accommodating these needs. Thus, it only needs to gather fellow companies that need these parts," he explained.

According to Arif, this will have at least three benefits, firstly creating employment for the spare parts industry, secondly reducing imports (import substitutions) which have a positive impact on the national trade balance, and thirdly the maintenance costs for IPC will be lower.

"This is part of the cost-effectiveness that Pelindo II carried out in the Second Semester of 2020," Arif said.

Reporter: Selvi Mayasari 
Editor: Barratut Taqiyyah Rafie
Source: https://industri.kontan.co.id/news/pelindo-ii-belum-jadi-ekspansi-ke-luar-negeri-ini-alasannya?page=2