Industry Minister encourages investors to develop large capacity shipyards

JAKARTA (rambuenergy.com) – Indonesia’s shipbuilding industry is still underdeveloped and under capacity. Therefore, the Indonesian government is luring investors to invest in shipyards that have the capacity to build and serve large-size vessels.

“Majority of national shipyards fall in the category of small and medium size,” said Industry Minister Saleh Husin. Based on the Industry Ministry’s data, as many as 122 newly developed shipyards has the capacity to build 1,000 dead weight tons (DWT) of vessels.

As many as 31 new shipyards have the capacity to build 1,000-5,000 DWT of vessels, while seven shipyards have the capacity to build and repair 5,000-10,000 DWT of vessels. There are only six new shipyards that have the capacity to build 10,000 DWT vessels.

“Indonesia is still lacking shipyards that have the capacity to build and serve over 50,000 DWT of vessels,” Minister Husin said.

He hopes that the shipbuilding roadmap that is being drafted by the government will lure investors to invest in shipyards that can build and serve up to 85,000 DWT of vessels, with various types such as warships, passenger and tanker vessels.

Therefore, the government and private shipbuilding industry associations are drafting the list of components and materials used to build vessels that will be exempted from import tariffs.

The government’s drive to lure investors in shipbuilding industry has begun to attract investors’ interest. The Chairman of National Investment Coordinating Board (BKPM) Franky Sibarani has said that five investors from Australia, Japan, US, South Korea and China have expressed their commitment to invest around US$9.3 billion in maritime sector. Of these, three of them are engaged in shipbuilding industries.

He however declined to disclose the names of the potential investors. Sibarani said his office has explained the government’s plan in the development of shipyard and shipbuilding industry in the country.

At end 2015, the government has promised to provide incentives to shipbuilding industries in the form of value-added tax restitution and exemption of import duties on imported vessel components as well as tax allowance.

The incentives are expected increase investment in shipbuilding industry outside Batam. (*)

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