PT Pelabuhan Indonesia officially operates
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 - PT Pelabuhan Indonesia Resmi Beroperasi
02 October 2021
By: Thresa Sandra and Imam Suhartadi
Jakarta – The merger of four port SOEs (State-owned Enterprises), PT Pelindo I, II, III, and IV, was inaugurated on Friday (1/10/2021) with the name PT Pelabuhan Indonesia (Persero). This merger places Pelabuhan Indonesia as the 8th largest container terminal operator in the world. This decision lowers logistics costs and boosts the company’s profit. Until now, logistics costs in Indonesia have been one of the most expensive in the world.
PT Pelabuhan Indonesia (Persero) or Pelindo owned a collective asset of around RP111.7 trillion last year. Meanwhile, their collective revenue and net profit reached around Rp29.3 trillion and Rp3 trillion respectively. Meanwhile, they had a capital of around Rp40.5 trillion and a debt of Rp71.1 trillion.
“This merger was conducted to make the national port industry stronger, improve maritime connectivity all over Indonesia, and improve the performance as well as the competitiveness of SOEs in the port sector. Alhamudlillah (Praise be to God), the merger of the four port SOEs to be integrated to be one Pelindo has been approved by the Finance Ministry and by a Presidential Regulation from President Joko Widodo,” SOE Minister, Erick Thohir, stated on Friday (1/10).
Previously, Arif Suhartono, PT Pelindo II President Director, said that, in the merger, Pelindo II became the surviving entity. Even though Pelindo II became the entity that received the three other Pelindo, the concept of this integration was to create a new brand.
Arif predicts that the Pelindo merger process will be fully completed in the second quarter of 2022. At that time, there will be four subholdings that are forecasted to carry out their own business operation.
The four subholdings or subsidiaries from the Pelindo merger consist of PT Pelindo Terminal Peti Kemas, PT Pelindo Multi Terminal, PT Pelindo Solusi Logistik, and PT Pelindo Jasa Maritim. Subsidiaries of Pelindo I-IV will be consolidated under the subholdings.
“Pelindo becomes the parent entity. Then, the subholdings as the subsidiaries and the sub-subsidiaries are the previous subsidiaries of Pelindo I-IV,” he stated.
Contribution to the state increases
SOE Ministry spokesperson, Arya Sinulingga, said that, previously, with subholdings focusing on their own business sector, services would improve and be more balanced from Sabang to Marauke. “Through this integration, operating and service systems will only use one system, which will make it easier for customers. With only one system, this means that container terminals from Aceh to Papua will only use one system. Then, non-container terminals will also have one system from Aceh to Papua. The same goes for logistics. We hope that this will improve efficiency,” he said.
Arya affirmed that, by merging Pelindo, the state would secure more revenue, in terms of dividends and tax.
“With the sectoral specification, revenue will be higher from tax and dividends. This will be a great leap for Pelindo’s contribution to the state,” Arya stated.
Global port
On a separate occasion, SOE Deputy Minister, Kartika Wirjoatmodjo, said that, previously, the merger would expand Pelindo’s scale to be a global port company. “One of the purposes of the merger was to improve the performance and the competitiveness of SOEs in the port sector. This merger was conducted to realise a stronger national port industry and improve maritime connectivity all over Indonesia,” the Deputy Minister, who is familiarly called Tiko, said.
In the port SOE merger, he continued that Pelindo would become the surviving entity. Meanwhile, Pelindo I, Pelindo III, and Pelindo IV will be terminated without liquidation.
Tiko said that, after the merger, Pelindo would establish four new companies to become subholdings. The function of these subholdings is to manage business lines and to develop business potentials in the future. This is different than the concept of Pelindo I through IV that managed their businesses based on area, where each Pelindo has a different system, which hinders efficiency.
Tiko explained that the integration would boost Pelindo’s position to be 8th largest container terminal operator in the world with a total container throughput of around 16.7 million TEUs. With the creation of the ecosystem, he continued that operation would be more efficient, which was expected to lower national logistics costs.
“With this change, we hope that capacity and efficiency will increase significantly. However, logistics costs are not only impacted by port services, but also other transportation modes,” he explained.
Logistics costs in Indonesia
Arif also said that one of the main reasons to integrate Pelindo I-IV was to suppress national logistics costs as there was still a lack of efficiency. Logistics costs in Indonesia were around 23% of the 2018-2019 gross domestic product, where 2.8% of the contribution came from logistics related to maritime transportation. “Ports and shipping are different. The contribution of sea costs reaches around 1.4%. This is higher than land transportation and inventory,” he stated.
Standardisation and efficiency of businesses and services in Pelindo after the merger are expected to lower logistics costs in stages. Logistics costs efficiency will also boost business growth and the national economy.
Pelindo integration will also provide new jobs through more investments in the port sector. Hence, it will also lower the unemployment rate.
Improve competitiveness
On a separate occasion, maritime observer from Tenth of November Institute of Technology (ITS), Raja Oloan Saut Gurning, is optimistic about the Pelindo merger improving Pelindo’s competitiveness. The merger will not only improve Pelindo’s service and performance standards, but also their efficiency in the organisational level as well as costs.
Moreover, he said that, recently, the world demanded the maritime business to be more concentrated so that performance could be balanced in various areas. Besides that, the logistics pattern is already door to door, so the supply chain needs to be integrated, not only in shipping and port sectors, but also in land transportation.
“In its application, this demands micro and practical integration in services, innovation, assets, and planning in the business unit so that it can be more integrated. This is what is expected from the Pelindo merger, competitiveness improvement. This merger has become a demand with support from the government through SOEs. I think that this is appropriate and better,” Saut said to Investor Daily on Thursday (30/9).
According to him, the merger will increase their assets by three times from Rp120 trillion to Rp340 trillion. He continued that there were currently around 12 million TEUs of containers served, which placed Pelindo at rank 7 or 8.
“Moreover, with Pelindo integrated, there will be specialisation plans for ports under its management. For example, logistics in Jakarta, containers in Surabaya, non-containers in Belawan, and marine as well as supporting services in Makassar,” he stated.
Echoing the statement, economic observer from INDEF, M. Rizal Taufikurahman, said that the Pelindo merger would suppress logistics costs. Moreover, the efficiency of logistics costs will be significantly better.
“This means that suppressing logistics costs is expected to boost the efficiency of national logistics. The national logistics system has yet to be able to increase the efficiency of inventory and logistics. Now, the merger will strengthen the purpose of the national logistics system to boost economic growth that is sustained by [efficient] logistics costs,” Rizal told Investor Daily in Jakarta on Friday (1/10).
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