Challenges, opportunities in RI shipping industry<\/p>\n
Former Director General of Sea Transportation, Soentoro<\/p>\n
The problems faced by Indonesian companies at the moment
\ninclude a decrease in capital and the presence of competition. In
\nthe case of the shipping industry, competition takes the form of
\nforeign shipping companies in possession of larger fleets.<\/p>\n
The situation is one that will not disappear of its own
\naccord, all the more so as we approach the so-called \"free market
\nera\" due to commence in 2003.<\/p>\n
At the moment, both the major issue and the major challenge
\nfor the industry is the fight for market share.<\/p>\n
Deregulation<\/p>\n
Efforts to improve the Indonesian shipping industry go back to
\n1995, when a series of steps aimed at deregulation were
\nintroduced.<\/p>\n
Although a regulatory framework was established that made it
\neasier to establish a shipping company, the industry is one that
\nrequires a solid capital base and efficient use of human
\nresources.<\/p>\n
At present, the acquisition of capital is extraordinarily
\ndifficult because of the high cost of borrowing from local banks.
\nRaising capital through loans from foreign banks is an avenue
\nthat was closed to local entrepreneurs once the economic crisis
\nenveloped the region in the middle of last year.<\/p>\n
Now, foreign borrowings come with many stringent conditions
\nand strings attached.<\/p>\n
In the case of the shipping industry, strings include the
\nrequirement to sail \"foreign\", a practice in which the vessel is
\nregistered in another country, for example Panama.<\/p>\n
This gives rise to the rather startling prospect of the
\nnational shipping company flying a foreign flag, rather than the
\nfamiliar red and white flag of Indonesia.<\/p>\n
Strategic Partnerships<\/p>\n
Partnerships are needed to build a suitable bridge that is
\ncapable of spanning the needs of exporters, as well as providing
\na long-term optimistic vision for companies.<\/p>\n
Once in place, appropriate partnerships lead to successful
\ncontracts, enabling shipping companies to grow in terms of
\ntrading and balance sheet activities as well as increase fleet
\nsizes.<\/p>\n
Pertamina, for example, has had a contract for over 12 years
\nwith one shipping company.<\/p>\n
In the past two years, the volume of cargo shipped through
\nthis contract has increased to more than 500 metric tons per
\nyear.<\/p>\n
The ability to produce increased cargo figures is important at
\nthis time because during the current economic crisis, the
\ngovernment is unable to offer any assistance to the industry.
\nHowever, this does not preclude the possibility of entering into
\njoint ventures with foreign shipping companies.<\/p>",
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"sponsor": "Okusi Associates",
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