ELVYN G. MASASSYA

PRESIDENT DIRECTOR

INDONESIA PORT CORPORATION II (IPC)

COOPERATIVE DEVELOPMENT OF PORT & LOGISTICS

INFRASTRUCTURE IN EMERGING MARKET

The 4th BUSAN INTERNATIONAL PORT CONFERENCE 2016

IPC PROFILE

EVOLUTION OF IPC TOWARDS A WORLD CLASS PORT OPERATOR

IPC BRANCHES

12 IPC Branch

1. Port of Tanjung Priok 2. Port of Sunda Kelapa 3. Port of Ciwandan Banten 4. Port of Cirebon 5. Port of Panjang Lampung 6. Port of Palembang

7. Port of Pulau Baai Bengkulu 8. Port of Teluk Bayur, Padang 9. Port of Pangkal Balam 10. Port of Tanjung Pandan 11. Port of Talang Duku Jambi 12. Port of Pontianak

Indonesia’s International Gateway-

Tanjung Priok Port

62% of Indonesia’s international

Container

Pelindo III 20 Branches

PELINDO II/ IPC

Pelindo I 16 Branches

Pelindo IV 22 Branches

1 2 3

4

5

3

7

8

6 10

9

11 12

JPPI

PPI

IPC SUBSIDIARIES

IPC Subsidiaries divided by 3 part of businesses, they are:

CORE BUSINESS: CARGO HANDLING

LOGISTIC AND PORT SERVICES

SUPPORTING BUSINESSES AND UTILITIES

Terminal

Petikemas

Indonesia

KSO TPK Koja

IPC Terminal

Petikemas

PT. Pelabuhan

Tanjung Priok

IKT

PT. JICT

1

International container 2

International & Domestic container Domestic

container Focus on domestic container and break bulk

Car/heavy eqp. handling

3

4

5

6

7 Logistics

8 PT ILCS Logistics ICT

9 New port developer

10 Dredging

11 Equipment maintenance

12 Vessel services throughout all IPC ports

PT JAI

Rukindo

PT MTI / IPC Logistics

13 Hospital management Energy supply within the port

Education and training center

14

15

16 E-business solutions nationwide

PT EDI

PT PMLI

PT EPI

PT RSP

INDONESIA’S LOGISTIC CHALLENGES

Indonesian Economy is dominated by Java and Sumatra province. There is a big gap of economic

growth between the West and the East of Indonesia. Imbalance cargo distribution has caused higher

price in Eastern Indonesia than in Western part

INDONESIA ECONOMIC ACTIVITIES

Source : World Bank

JAVA

EXISTING LOGISTIC COST

0

2000

4000

6000

8000

10000

12000

0

1000

2000

3000

4000km USD/TEU

Cost

Distance

From Jakarta to…..

Source: Quotes from domestic logistic company, 2012

It is less expensive to ship box from

Jakarta to Hamburg (11.000 km) than

from Jakarta to Sorong (3.000 km)

High Logistict Cost to Send Goods between Islands

(USD/TEU)

(Km)

CURRENT CONDITION OF HINTERLAND CONNECTIVITY

Cargo distribution from the port to final destination in Indonesia is often hindered by poor land transportation due to traffic jam, long destination, or poor road condition.

Furthermore, there is no added value services offered by the port such as integrated industrial zone/logistics park.

Traffic jam in port surrounding

Poor road condition to the port

Long destination from Tanjung Priok port to industry zone in Cikarang, Karawang, Cikampek

POTENTIAL ECONOMIC DEVELOPMENT

The average economic growth in the western region of Indonesia

already slowing. Indonesia’s economic growth will grow more potential

in the eastern of Indonesia

<5%

5-7%

>7%

2010 Population

1.5k-2M

2M-5M

5M-10M

>10M

GDP CAGR 2010-2030 Port

Industrial Area

Road Access SOURCE: 2010 Population Census, Indonesia’s Central Bureau of Statistics; McKinsey Global Institute analysis

JAVA

SUMATERA

BALI AND NUSA TENGGARA

KALIMANTAN

SULAWESI

MALUKU

PAPUA

GDP Development, 2010 -2030

Some 90% of urban areas whose GDP is growing at more than 7 percent are outside Java

Infrastructure Requirements

POTENTIAL COMMODITIES IN INDONESIA

Sulawesi

1. Fish

2. Cement

Papua

Fish

Nusa Tenggara

Fish

Kalimantan

1. Cement

2. Crude Palm Oil (CPO)

Sumatera

1. Cement

2. Crude Palm Oil (CPO)

3. Fish

Jawa

1. Cement

2. Car

3. Cotton

4. Fish

5. Manufacture

There is a huge cargo potential in Indonesia, which is still exported in the form of raw materials

INDONESIA AS THE GLOBAL MARITIME AXIS

The Government Priority

•Reduce logistics cost

•Increase certainty of supply chain

•Increase job vacancy

•Increase the attractiveness of investment for private

•Fostering regional economic growth

conclusion: Port Development with the large-scale integrated industrial area

President Joko Widodo has set the ambition to turn Indonesia

into a

Global Maritime Axis

How to achieve

•Increasing port capacity

•Improving connectivity

•Lowering cost of doing business

•Improving competitive position

•Integrating port industry and logistics

PORT – INDUSTRIAL LINKAGE : INTEGRATED PORT CONCEPT

INTEGRATED PORT CONCEPT

A Import and export cargoes loading/unloading activities

B Integration between port and industrial area that integrated or close to the customs authorities can reduce the time of deliveries of goods

C Goods from industrial areas can be directly distributed to the next production stage or even can be directly sent to customers outside the industrial area

D Relatively shorter stacking time at container yard, containers ready to be transported to the industrial area that integrated to the port

INTEGRATED PORT CONCEPT

Integrated port elements and services

Integrated port has increasing the efficiency of world-class ports up to 33-55%

Port Industrial Area

Distribution Storage/

Warehouse

Providing buffer zones as temporary storage

Flexibility to provides special cargoes storage e.g. cold storage cargoes

Providing efficient loading/unloading process

As national/regional logistic gateway

Providing one-stop-shop port related activities

Providing container and non containers terminal operation facilities

As the centre of pre-departure/post-arrival activities

Providing strategic location and manages supporting activities for industries

Manages freight forwarding services for distribution of the cargoes

Access for efficient distribution network

INTEGRATED PORT GOALS

16 PT Pelabuhan Indonesia II

Leverage the Port Facilities

the shorter distance between the port and industrial area will increase port utilization and to simplify cargo checking/customs clearance, in the end the

logistics cost will be reduced

Adequate Job Creation

Generate a significant job opportunity for local human resources

High Value-Added Employment

To attract jobs which require medium-high skills to grow and increase the number of skilled workers in the area

Sustainable Business & Operating Model

To create sustainable business & operating model and give more certainty of logistics business in the future

Pioneering Initiative Create more added value initiatives through innovation

Jakarta

Surabaya

Kuala Tanjung

Makassar

Sorong

Pont ianak Bit ung

MIDDLE REGION

EASTERN REGION

Sea Toll main corridor

Kuala Tanjung

Jakarta

Surabaya

Pontianak

Makassar

Bitung Sorong

WESTERN REGION

IMPLEMENTATION OF INTEGRATED PORT IN JAVA

JAVA INTEGRATED INDUSTRIAL AND ESTATE

Java Integrated Industrial and Ports Estate (JIIPE) is a project that integrates deep sea port, industrial estate and residential estate into one package.

JIIPE is conveniently located in Gresik - East Java, 24 km from Surabaya the capital city of East Java, with fast growing economic and conducive investment

Manyar

Port

IPC STRATEGIC PROJECTS: TO IMPLEMENT PORT INTEGRATED

CONCEPT

IPC STRATEGIC PROJECTS

PORT OF JAKARTA

CIKARANG BEKASI LAUT INLAND WATERWAY

NEWPRIOK PROJECTS

KIJING PORT DEVELOPMENT & SEZ

SORONG PORT DEVELOPMENT & SEZ

NEW PRIOK PORT DEVELOPMENT

The New Priok Port Development is a project of

terminal construction to accommodate the increasing

number of international cargo traffic and to boost high

performance and capacity at Port of Tanjung Priok.

Location : Tanjung Priok, Jakarta

Project Value : ±Rp 12 Trillion

Current Progress :

full Comercial operation for CT 1 on August 2016;

Development Phase 1 (CT 2; CT 3; PT 1; PT 2)

Development Period : 2012 - 2027

EASTERN ACCESS ROAD

Phase 2 (Future Development)

SOUTHERN ACCESS ROAD

JTCC

CT

1

CT 2 CT 3

PT 1 PT2

Proposed Area

for Logistic Hub

DESCRIPTION INFORMATION

NEW PRIOK CONTAINER TERMINAL (NPCT) 1

INTEGRATION OF NEW PRIOK WITH THE INDUSTRIAL AREA (KBN AREA)

CIKARANG BEKASI LAUT (CBL) INLAND WATERWAY

DESCRIPTION

Included in the National Strategic Projects

(Presidential Decree no.3 in 2016)

CBL Inland Waterways is a project

development in order to optimize the potential

of river basins as a backup transport of goods

by river, As well as link-off the road Port of

Tanjung Priok and hinterland area.

It Is expected to reduce the density of the flow

of goods by road to the Port of Tanjung Priok.

the use of barges would be more efficient in

terms of cost and exhaust emissions.

Location : Cikarang-Bekasi, West Java

Total Area : 200 Ha

Capacity : 1.6 Million TEUs/year

Total Investment : ±Rp 5 Trillion

Funding Scheme : Internal IPC, Global Bond, and Investor 18.0

4.5

70

100.0

5.0

CANAL DESIGN

INFORMATION

PORT OF JAKARTA Collaboration :

Port of Jakarta

Port of Jakarta is a cooperation project between PT. Pelindo II, Jakpro, and the Port of

Rotterdam. Port of Jakarta is functioned as an integrated port which consist of

industrial zone to support terminals in Tanjung Priok. The industrial area is indicated

by the island O, P, and Q of ± 1500 ha

KIJING PORT DEVELOPMENT WITH SPECIAL ECONOMIC ZONE (SEZ)

Onshore Facilities

Offshore Facilities

Included in the National Strategic Projects (Presidential

Decree no.3 in 2016)

Kijing port is developed as a solution to limited land in

the port of Pontianak

Kijing port is expected to accommodate large-size ships,

able to reduce logistics costs, as well as optimizing the

potential export of local products Kalimantan Barat (CPO,

Bauxite)

Location : West Kalimantan

Total Area : 1350 Ha

Total Investment : ±Rp 5,1 Trillion

Construction Plan : 2017

Operation Plan : 2020

Funding Scheme : Internal IPC & Investors

DESCRIPTION

INFORMATION

SORONG PORT DEVELOPMENT WITH SPECIAL ECONOMIC ZONE (SEZ)

Location : West Papua

Total Investment : Rp 2,4 Trillion

Construction Plan : 2017

Operation Plan : 2020

Funding Scheme : Internal IPC, Global Bond, & Investors

Included in the National Strategic Projects

(Presidential Decree no.3 in 2016)

The Sorong port development is one of part of

project development to support “Toll Laut

Program, where it can accommodate ships with

size 3000-5000 TEUs

This project can foster industrial activity for the

eastern Indonesian region

Development Plan

Sorong Port (Phase 1)

Container Yard Office Area

DESCRIPTION

INFORMATION