Djakarta Lloyd to buy five ships from PT PAL
Djakarta Lloyd to buy five ships from PT PAL
JAKARTA (JP): The state-owned international freighter service
company PT Djakarta Lloyd has ordered five container ships worth
US$118.71 million from the state-owned shipbuilder PT PAL in
Surabaya.
"We will sign the purchase contract with PT PAL later this
month," Djakarta Lloyd's president, M. Muntaqa, said yesterday.
Speaking after a hearing with the House of Representatives
Commission V for transportation, telecommunication, tourism and
public works, Muntaqa said Djakarta Lloyd will partly finance the
procurement with a loan of $89.28 million from the state-owned
Bank BNI 1946.
"The other $29.43 million will be derived from an additional
equity fund from the government," he said.
He said that the five ships will be completed in September
1998 and will be used for local and foreign shipping services.
Two of the container vessels will be of the 26,200 dead weight
ton size, capable of carrying 1,600 twenty-feet equivalent units
(TEUs), while three will be of the 5,700 dead weight ton (DWT)
class capable of carrying 400 TEUs.
Muntaqa said that his company also plans to procure nine
more ships between 1998 and 2004, though he did not say from whom
the vessels will be bought.
He added that Djakarta Lloyd, which was in the red before
1994, has been profitable during the last three years.
Last year, the company saw its net profit increase by 382
percent to Rp 16.1 billion ($6.9 million). During the first
quarter of this year it posted Rp 784 million in net profit.
Local share
Muntaqa said that the company, which currently operates only
three full containers and three semi-containers, is trying to
increase its market share of the international freight market.
"But we're facing a number of problems, including lack of
capital and very old ships," he said.
"All of our ships are already old and no longer efficient. We,
therefore, cannot compete with foreign shipping companies which
have faster and more sophisticated ships," he noted.
He also cited the high lending rate in Indonesia, which has
reached more than 20 percent per year, and an unconducive
condition which is hindering growth in the shipping sector.
"The other local shipping companies are facing the same
problems," he noted.
He said that it also takes a long time for local shipping
companies to get bank loans.
Because the nature of the shipping industry is capital
intensive, slow yielding and high risk, he suggested that loans
to freighter companies be long term. "More than ten years if
possible," he said.
According to Muntaqa, the government needs to further
deregulate the shipping industry to enable local shipping
companies to compete with foreign companies whose share in the
domestic shipping services sector continues to increase.
He added that in foreign countries governments give preference
to their shipping sector to stimulate development.
Currently, he said, local shipping firms only have a 3.2
percent share of the international freighter service market to
and from the country.
The government is hoping that local shipping firms will have a
10 percent share at the end of the current Five Year Development
Plan in 1999.
But Muntaqa said that to realize the target the local shipping
companies will need at least 1.63 million DWT in new vessels.
"Currently the country's ocean-going general freighter fleet
is only about 347,000 DWT, down sharply from 827,000 DWT in
1982," he noted. (13)