BUSINESS OPPORTUNITES AND CHALLENGES IN DEVELOPING INDONESIA’S SHIPBUILDING INDUSTRY

BUDHIARTO SULAIMAN

HEAD OF SUPPORTING INDUSTRY, IPERINDO

GERMAN-INDONESIA FORUM ON SHIPBUILDING AND MARITIME TECHNOLOGY SOLUTIONS

SURABAYA, FEBRUARY 27TH, 2018

26% 25%

37%

Sumber: Kementerian Perindustrian (2012)

250 Shipyard

Jawa:

92 Shipyards

Sumatera:

65 Shipyards

Kalimantan:

62 Shipyards

12%

30 Shipyards

SHIPYARDS INDUSTRY IN INDONESIAN ARCHIPELAGO

MARITIME INDUSTRY CHARACTERISTIC

PT. PAL INDONESIA

•Global competitiveness

• Labor Intensive

• High Capital

• High Investment

• Multi Years Basis

• High Technology Content

• Multiplier Effect To Other Industries

• High Demand For Steel

•High demand for Supporting industry

• Strategic Industry

MARITIME INDUSTRY

Offshore Fabrication

Equipment

Manufacture

Ship Repair

ShipBuilding

R & DINSTITUTION

TRANSPORTATION INDUSTRIES

HEAVYINDUSTRIES

DEFENCEINDUSTRIES

OIL & GAS INDUSTRIES

SUPPORTING INDUSTRIES

FINANCIAL INSTITUTION

FISHERIES INDUSTRIES

COMPETITIVE

NESS ??????

• BUSINESS PROCESS

• PROJECT MANAGEMENT

• QUALITY STANDARD

MARITIME INDUSTRY

CLUSTER

SOLUSI

HUMAN RESOURCES

Yard Facilities

Development

Technologies &

know how

Design &

EngineeringPOWER PLANT INDUSTRIES

PORT INDUSTRIES

TOURISM INDUSTRIES

SOLUTION

DESIGNCENTER

DPP IPERINDO Office :

Komplek Griya Inti Sentosa

Jln Griya Agung No 77

Sunter – Jakarta Utara

Tlp (021)6404253,6411513

Fax (021)6404253

Email: iperindo@indo.net.id

Website : www.iperindo.org

107 Shipyard 3 Offshore Fabricator

33 Supporting Industry

7 Consultant & Class

Product Refference :

50.000 DWT

Badan Sertifikasi (BS): Certification & Assessment for

capacity & capability for National Shipyard Company

IKATAN PERUSAHAAN INDUSTRI KAPAL DAN LEPAS PANTAI INDONESIA

(INDONESIA SHIPBUILDING AND OFFSHORE INDUSTRIES ASSOCIATION)

Barge, 32.87%

Tug Boat, 30.80%

General Cargo, 19.31%

Tanker, 5.37%

LCT, 3.99%

Passenger, 3.93%

Container, 1.95%

Bulk, 0.88%

Ro-Ro, 0.52%

Ferry, 0.37%

Other, 3.72%

INDONESIAN FLAG CARRIERS

Sources: Ministry of Transportation Distribution of age

Indonesian Flag Registered

Pusat Distribusi Provinsi

Pusat Distribusi Nasional

Legend:

Indonesia as a global maritime axis is enhancing inter-island connectivity and upgrading port

infrastructure within the Indonesian archipelago, which encompasses thousands of islands and spans

almost 6 million square kilometers.

Inter-island connectivity, it is hoped, would enable effective internal utilization and prevent external

poaching of maritime resources. An inter-connected archipelago could leverage Indonesia’s choke

points and maritime corridors to enhance trade and commerce.

ALKI (ALUR LAUT KEPULAUAN INDONESIA) ARCHIPELAGIC SEA LANES AS

A GLOBAL MARITIME AXIS

ROADMAP NATIONAL MARITIME INDUSTRY

• New Shipbuilding up to 50,000 DWT

• Ship Repair & Maintenance up to 150,000 DWT

• Upgrading National Ship Design and Enginering Centre (NaSDEC)

• New Shibuilding up to 85,000 DWT

• NaDEC design capability for special vessel (LNG/ LPG carrier & Naval Vessel)

• Developing National Supporting Industry

• NewShipbuilding Up to 150,000 DWT

• Ship Repair & Maintenance up to 200,000 DWT

• NaSDEC design capability for special vessel

(submarine, FPSO vessel)

• Strong supporting industry

• New ShipBuilding up to 200,000 DWT

• Ship Repair & Maintenance up to 300,000 DWT

• NaSDEC become center of excellent for ship

design & engioneering

• FullyI local content from National Supporting

Industry

2012

2015

2020

2025

Sumber: Kementerian Perindustrian (2015)

1. OIL TANKER (PERTAMINA ) : 3.500DWT, 6.500 DWT & 17.500 DWT.

2. DEFFENCE MINISTRY : PATROL VESSEL, CORVETE, FREGATE, LST, TANKER, SUBMARINE

3. FISHERY MINSTRY: 3.500 FISHING BOAT (3, 5, 10, 20 & 30 GT), PATROL CRAFT , TRAINING

VESSEL, SURVEY VESSEL

4. NATIONAL COAST GUARD & SAR : PATROL VESSEL, SAR VESSEL

5. PORT COMPANY : TUG BOAT & PILOT BOAT

6. RESEARCH & TECHNOLOGY MINISTRY : SURVEY & RESEARCH VESSEL

NEWBUILDING PROJECT PLAN FROM GOVERNMENT & STATEOWNED COMPANY 2015-2018

INVESTMENT PROJECTION IN 2015-2019

SOURCE: Bappenas, 2015

Purchasing 609 ships in 2015-2019

83 Container Ships ~ Rp 28,15 Tril ~ US$ 2.08 Bil

500 Traditional Ships ~ Rp 25,00 Tril ~ US$ 1.85 Bil

26 Cargo Passenger Ships ~ Rp 4,16 Tril ~ US$ 308 Mil

Rp. 57,3 Tril

~ US$ 4.25 Bil

For Ships

Rp. 39,5 Tril

~ US$ 2.93 Bil

For Seaport

PROYEK FLOATING STORAGE /

UPCOMING PROJECT

2 unit FPU IDD Chevron

1 unit FPU ENI - Jangkrik

1 unit FPSO HCML

1 unit FPU HCML

1 unit FPSO JOB P-PS

1 unit FPSO Santos – Ande Ande Lumut

FSO Gagak Rimang MCL

FPSO Ratu Nusantara

Sumber: SKK Migas (2015)

REGULATION MILESTONE FOR NATIONAL MARITIME INDUSTRY

TARGET NATIONAL MARITIME INDUSTRY

INDEPENDENT AND COMPETITIVE

NATIONAL

MARITIME

INDUSTRY

Opportunities

and market

confidence

Increased capacity

and competence

(Investment & QCDS)

Support Funding

Harmonization

of policies and

regulations

• Able to meet Domestic Demand

• Reduce dependence on imports as the Growth& Development of Supporting industry

• Employment and increase the competence of human resources.

• Increase market confidence , both nationally and regionally.

NO COMPANYINVESTATION

LOCATION REMARKS*)

1 PT. Steadfast Marine Pontianak DEVELOPMENT

2 PT. Yasa Wahana Tirta Samudera Madura NEW SHIPYARD

3PT. Dumas Tanjung Perak Shipyard

Madura NEW SHIPYARD

4 Krakatau Shipyard Group

Bojonegara (Banten)

DEVELOPMENT

Halmahera

NEW SHIPYARD

MeraukeNEW SHIPYARD

5 PT. Multi Ocean Shipyard Karimun DEVELOPMENT

6 PT. Daya Radar Utama Lamongan DEVELOPMENT

7 PT. Citra Shipyard BatamDEVELOPMENT

8 PT. Dok & Perkapalan Surabaya Lamongan DEVELOPMENT

9 PT. Industri Kapal IndonesiaMakasar & Bitung

DEVELOPMENT

10PT. Adiluhung Saranasegara Indonesia

MaduraDEVELOPMENT

11 PT. Dukuh Raya Dockyard Lombok DEVELOPMENT

INVESTATION PLANNING OF THE SHIPYARDS

IN INDONESIA

PUSAT DESAIN DAN REKAYASA KAPAL NASIONALNATIONAL SHIP DESIGN & ENGINEERING CENTER (NASDEC)

NaSDEC Building

Jl. Taman Teknologi ITS, Sukolilo, Surabaya 60111

Telepon : +62 31 599 4468, Fax : +62 31 599 4468

Website : www.nasdec-indonesia.com

Appointed by Ministry of Defence as

National Naval Ship Design & Engineering

Center

Design & Engineering services include

Research & Development of Ship & Offshore

Structure innovative & efficient at optimum

performance

Updated Ship Design Soft Ware & fully

supported by Institute Of Technology 10

November Surabaya, Ministry Of Industry &

Ministry of Defence

1. Towing Tank : L 235,4 x B 11m x D 5.5 m

2. Maneuvering & Ocean Engineering Basin , deep

water 60 x 35 x 2.5 m and shallow water 45 x

35 x 1.25 m

3. Cavitation Tunnel Test : 0.85 x 0.85 x 4 m.

Lab. Hidrodinamika Indonesia

UPT-BPPH BPP Teknologi

Jl. Hidrodinamika, BPPT, Sukolilo (Kompleks ITS)

Surabaya 60112 INDONESIA

Phone: +62315948060

Fax: +62315948066

Email: info@bppthidrodinamika.com

THE PRODUCT OF LOCAL SUPPORTING INDUSTRIES

CURRENT SITUATION ON EQUIPMENT AND SHIP COMPONENT INDUSTRIES

• Since New Government era year 2014-2019, with Vision : “Become world axis maritime”, they order around 150 ships for Fiscal Year 2015-2017;

• This is a chance for local industries to supply the equipments and ship components.

• But until now, they only capable to meet 30-35% of portion, and the rest 65-70% still import.

• Since year 2005, where cabotage principle applied, the shipping lines had permit to import second hand ships.

• Within 10 years (year 2015), number of fleets had increased double, from around 6,500 ships up to around 13,000 ships.

• But only small number of ships were built in local shipyards.• This situation made also small number orders for equipment and ship

component, eventually investment in this sector were not interesting.

CHALLENGES

CHALLENGES IN THE DEVELOPMENT INDONESIA’S SHIPBUILIDNG INDUSTRIES

• FISCAL :

• TAX: PPN, PPH

• IMPORT DUTY

• FINANCING : INVESMENTS CAPITAL & WORKING CAPITAL

• NON FISKAL :

• DEPENDENCY OF IMPORT BECAUSE OF LIMITED SUPPORTING INDUSTRIES

• LAND LEASE IN THE PORT AREA

• MARKET TRUST

• PROJECT MANAGEMENT

• DISHARMONITATION OF GOVERNMENT REGULATION

• NEW CONSTRUCTION OF THE SHIPBUILING

• THE BIGGEST MARKETS STILL ARE FROM GOVERNMENT AND STATE COMPANY (BUMN)

• NOT ALL GOVERNMEMENT INTITUTION ORDER THE VESSEL IN LOCAL SHIPYARDS, FURTHERMORE ITS BECAUSE

EKSPOR CREDIT

• PRIVATE COMPANY FOR SHIPPING COMPANIES STILL ARE NOT TRUSTING TO LOCAL SHIPYARDS (ONLY TUG BOAT

AND BARGE VESSEL)

• REPAIR VESSEL :

• THE CAPACITITES OF THE SHIPYARDS ARE 70% SO THAT THE QUEUE OF THE VESSEL FOR THE READY TO REPAIR UNTIL

3 MONTHS

DOCK SPACE FOR REPAIR THE

VESSEL

• The capacities for reparing vessel in the Indonesia is 12.000.000

DWT ( 8.500.000 GT)

• The quantities of the vessel which is Indonesian vessel is 20.000 unit

equally to 18.000.000 GT.

• The needs of dock spave for reparing the vessel per years

60% x 18.000.000 = 10.800.000 GT of the existing capacities

8.500.000 GT.

• The deficiency dock space per years is 2.300.000 GT .

• The capacitites of the shipyards are 70% so that the queue of the

vessel for the ready to repair until 3 months

COMPONENT STRUCTURE OF

SHIPBUILDING

1. Steel Plate

2. Electrode

3. Gas

4. Insulation

5. Main Switch Board

6. Air Conditioning

7. Paint

8. Deck Machineries

9. Out Fitting, etc.

MATERIAL

Machinery :

• Main engine & gear box

• Shaft & propeller

• Main generator

• Boiler

• Pump

• Purifier

• Oil water separator

• Sea water treatment

• Fresh water generaotr

• Air condition unit

Electric & Electronic :

• Main & emergency swith board

• Navigation & radio equipment (radar,auto pilot, gyro

• & magnetic compass, echo sounder, speed log, rai ,

• Gps, radio comm gmdss, uhf, vhf, immarsat-c, navtex)

• Communication system (public adresor, sound power

• Tlp, fire alarm, wistle horn, electric clock)

• Transformer, battery charge

• Electric cable

• Ligthing

35 % domestic65 % import

Production

/Construction :

100% (domestic)

Design &

Engineering :

100% (domestic)

+ 2,5 %

+ 22,5 %

+ 10 %

Propeller1. PT Tesco Marine (Jakarta)

2. PT Risea Propulsion Indonesia (Batam)

Pumps1. PT Bumi Cahaya Unggul (Jakarta)

2. PT Grundfor Pompa (Jakarta)

3. PT Guna Elektro (Jakarta)

4. PT Ebara Indonesia (Bogor)

Swicthboard/Panel Distribution1. PT Siemens Indonesia (Jakarta)

2. PT Nobi Putra Angkasa (Jakarta)

3. PT Schneider Indonesia (Jakarta)

4. PT Unindo (Jakarta)

5. PT Indokomas buana Perkasa (Jakarta)

6. PT Uni Makmur Elektrika (Cibinong)

7. PT Ungaran Multi Engineering(Smrg)

8. PT Teknik Tadakara Sumberkarya (Srby)

9. PT Otessa Perkasa (Surabaya)

Radio & Navigation1. PT Dharma Dwitunggal Utama (Jkt)

2. PT Indisi (Bandung)

3. PT Inti (Bandung)

4. PT LEN Industri (Bandung)

Deck Machinery1. PT Pindad (Bandung)

2. PT Barata (Gresik)

3. PT Plimsol Indonesia (Surabaya)

Paint1. PT Hempelindo (Bekasi)

2. PT Chugoku Paints Indonesia (Jkt)

3. PT International Paint Indonesia(Jkt)

Steel Plate1. PT Krakatau Steel (Cilegon)

2. PT Gunawan Dianjaya Steel (Surabaya)

3. PT Gunung Raja Paksi (Bekasi)

4. PT Krakatau Posco (Cilegon)

Crane1. PT Pindad (Bandung)

2. PT Lelangon (Sidoarjo)

EQUIPMENTS & SHIP COMPONENTS INDUSTRIES IN INDONESIA

Steering Gear1. PT Pindad (Bandung)

2. PT Dumas-TTS-Jinsan (Surabaya)

AC/OWS/Cable1. PT Ilthabi (Batam)

2. PT Protono (Jkt)

3. PT PCM (Tangerang)

SOLUTIONSOLUTION

OPPORTUNITY COOPERATION :

1. INVESTMENT OF SUPPORTING INDUSTRIES

( MAIN EQUIPMENT & MACHINERIES) –

LOCAL CONTENT LEVEL DEVELOPMENT

(ENGINE (MAIN / AUX) , ANCHOR &CHAIN,

PROPELLER, DECK MACHINERIES,

NAVIGATION & TELECOMUNICATION,

ACCOMODATION, CMS)

2. ON THE JOB TRAINING FOR UPGRADING

MANPOWER SKILL

3. JOINT PRODUCTION FOR DOMESTIC AND

INTERNATIONAL MARKET (Indonesian industries

have their facility, including : land, workshops, machines, workers)

MARITIME INDUSTRY

COLABORATION

PROPOSED ROADMAP IN INDUSTRIAL COLLABORATION

1. 1st year :

• Main parts and auxilliary parts will casting and machining in German;

• Accessories will produce in Indonesia;

• Final Assembly in Indonesia

2. 2nd year :

• Main Part will casting and machining in German;

• Auxiliary Parts will casting in Taiwan and Machining in Indonesia;

• Accessories will produce in Indonesia;

• Final Assembly in Indonesia.

3. 3rd year :

• Main Part will casting and machining in German;

• Auxiliary Parts will casting and Machining in Indonesia;

• Accessories will produce in Indonesia;

• Final Assembly in Indonesia.

4. 4rd year :

• Main Part will casting in German and Machining in Indonesia;

• Auxiliary Parts will casting and Machining in Indonesia;

• Accessories will produce in Indonesia;

• Final Assembly in Indonesia.

1. TO INCREASE THE DOMESTIC’S SUPPORTING INDUSTRIAL COMPETITIVENESS ON PRODUCTION, IT IS

NECESSARY TO PROVIDE THE TAX INCENTIVE IN THE FORM OF IMPORT DUTY BORNE BY GOVERNMENT ON

THE IMPORT OF GOODS AND MATERIALS ( BMDTP – BEA MASUK DI TANGGUNG PEMERINTAH)

2. IMPROVEMENT OF PP NO 69 TAHUN 2015 OF ABOUT THE TAX FOR SHIPYARDS ( PPN TIDAK DIPUNGUT,

SEHINGGA BERLAKU JUGA UNTUK SELURUH INSTANSI PEMERINTAH YANG PERLU MEMBANGUN KAPAL DAN

PENYEDERHANAAN ATURAN PELAKSAAAN PPN TIDAK DIPUNGUT SEHINGGA MENGURANGI COST OF

MONEY SERTA MERINGANKAN PELANGGAN )

3. PENURUNAN SUKU BUNGA PINJAMAN BAIK UNTUK MODAL KERJA MAUPUN MODAL INVESTASI INDUSTRI

PERKAPALAN, DENGAN BENCHMARK KEPADA NEGAR LAIN YANG SUDAH MENERAPKAN PERBEDAAN SUKU

BUNGA INDUSTRI MARITIM DENGAN SUKU BUNGA KOMERSIL LAINNYA.

4. LAW ENFORCEMENT FOR ALL GOVERNMENT INSTANTION TO PURCHASE THE VESSEL IN LOCAL SHIPYARDS

THANK YOU