Erick: Pelindo merger strengthens national logistics ecosystem
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Erick: Merger Pelindo perkuat ekosistem logistik nasional
20 January 2023
Jakarta - State-owned Enterprises (SOE) Minister Erick Thohir mentioned that the merger of PT Pelabuhan Indonesia (Persero) or Pelindo could strengthen the national logistics ecosystem. Erick also assessed that the merger was proven to have boosted the port SOE’s position to be the 8th largest container terminal operator in the world.
“The merger has been proven to facilitate coordination in port management all over Indonesia. Hence, their contribution to the country through dividends, PNBP (non-tax state revenue), concessions, and income tax also significantly increased,” Erick said when he attended Pelindo Forum in Ciawi, Bogor Regency, West Java on Thursday (19/1/2023).
Even though it has not been two years since the merger, Erick is quite satisfied with Pelindo’s performance that has increased its contribution to the country. In the last two years, Erick said that Pelindo’s concessions reached Rp360 billion in 2021, which increased to Rp473 billion in 2022. The same goes for PNBP that reached Rp157 billion in 2021 and Rp173 billion in 2022. Then, Pelindo’s income tax in 2022 reached Rp1,815 trillion, which increased from Rp1.185 in the previous year. Meanwhile, Pelindo’s dividends reached Rp1,317 trillion in 2022, which increased significantly from Rp560 billion in 2021.
“From what we can see, Pelindo’s total contribution to the country from 2021 to 2022 reached Rp6.03 trillion. This amount was recorded in October 2022, so it can be higher if it has been finalised. Our target in 2025 reaches Rp21 trillion,” the man born in Jakarta said.
Erick said that the merger of Pelindo did not only improve operational, financial, and human resource performances, but it also improved the synergy among ports, integrated shipping networks, and hinterland connectivity that boosted chain efficiency and reduced logistics costs. The purpose of optimising the hub and spoke network through collaborations with shipping lines and business partners is to reduce cargo gap and imbalance, especially in eastern Indonesia, as well as logistics costs.
“Pelindo has 31 strategic initiatives that will be implemented from 2021 to 2025. The target must be able to create an added value of Rp5.8 trillion,” Erick continued.
Since they were first established, Erick emphasised that there were four strategic pillars that must be achieved by Pelindo, namely world-class port transformation, logistics ecosystem strengthening, maritime supply chain efficiency, and company value increase. Erick said that Pelindo must collaborate with other parties to develop industries around ports.
“For example, Pelindo successfully built Kijing Terminal to support regional potential and economic development based on local resources in West Kalimantan. This will support balanced construction and create jobs,” he said.
Erick also asked Pelindo to increase collaborations in developing and integrating industrial estates with ports through cooperation to provide integrated modes of transportation, including with SOEs. This has previously been carried out by cooperating with KAI and PTPN III to optimise Kuala Tanjung Terminal, Sei Mangkei Special Economic Zone (SEZ), and railway freight transportation.
He also encouraged Pelindo to focus on business expansion and establishing strategic partnerships to develop ports, improve sea connectivity, and develop land logistics ecosystem connectivity. According to Erick, Pelindo can establish cooperation with reputable strategic partners with experiences on international trade routes.
“This opens opportunities in Indonesia’s export market and increases our container market share to compete on a global scale,” he revealed.
Competence standardisation
Erick said that the merger also provided benefits for the people as it increased port productivity and efficiency through port standardisation and connectivity improvement by using the hub and spoke system.
Erick mentioned that Pelindo’s solid performance today was thanks to the hard work of all parties, including the board of directors, commissioners, as well as Pelindo’s staff all over the country.
Erick also said that Pelindo must continue their competence standardisation through training programs that increase their business capability to face future challenges. Besides that, port transformation through port standardisation to improve service quality must continue. The company’s value must also be improved through equity story, asset optimisation, digitalisation, and human capital capability improvement.
To improve the efficiency and core competence of each business unit, Erick asked Pelindo to implement business organisation by handing over business operation from branch or regional offices to subholdings.
“We must fight for regional battle and to be a major player in the global port industry,” Erick stated.
