Harbor Master
    Category: SOEs By : Ardian Wibisono Read : 184 Date : Tuesday, May 01, 2018 - 15:03:16

    Ahmad Zamroni For Forbes Indonesia

    Led by President Director Elvyn Masassya, the largest state-owned port company PT Pelabuhan Indonesia II (Persero)—now known as the Indonesia Port Corporations II (IPC)—had a good year in 2017. It recorded a 43% jump in net profit to Rp 2.2 trillion—the highest ever—on back of a 22% growth in revenue to Rp 10.9 trillion. The company also hit a significant milestone by launching the first-ever direct cargo route connecting Jakarta’s Tanjung Priok and Los Angeles, cutting up to 20% of the cost of shipping through Singapore, the traditional transshipment port in the region.

    “One of the indicators to see whether Indonesia’s economy is performing is to look at its ports activity, which reflects trade and goods distribution. Last year IPC’s performance was far better than the previous year,” Elvyn says in his office with big windows overlooking the busy Tanjung Priok Port—the country’s largest—with its giant cranes, cargo ships and colorful boxes of containers stacks. Elvyn has headed IPC since April 2016, replacing the previous President Director RJ Lino, who got slapped with a corruption case. Elvyn’s background is actually in finance—he started his career with Bank Negara Indonesia, then became the head of the Social Security Administration Body for Employment (BPJS for employees), with over Rp 200 trillion of assets under management.

    Elvyn also sees good trade winds ahead. For this year he feels revenue could go up another 12%. Container volume could go up 15% year-on-year to nearly seven million TEUs handled, triple the global outlook of 5% growth (TEUs are twenty-foot equivalent units, the global measure of container volume). He also expects transshipment cargo to double to 800,000 containers from last year’s 400,000. Port operations are all about efficiency, so he’s been trying to bring down Tanjung Priok’s notoriously long dwell time—to three days, versus up to one week in 2014 (dwell time is the amount of time it takes to load or unload a ship).

    To do so, Elvyn is embracing technology and innovation to improve its logistics. The company has already set aside Rp 1 trillion for IT development until 2020. One product of that innovation drive is that all transactions in Tanjung Priok are already cashless. The same digitalization will also be implemented in all ports managed by the company (12 in total, including Tanjung Priok). This way, for example, freight documents that previously took a long time to process due to a stamp requirement from several parties can be processed online and be more efficient. In terms of infrastructure, this year Elvyn says the company will commence several strategic projects like establishing and developing new ports such as Kijing in West Kalimantan and in Sorong, developing waterways connecting Tanjung Priok and Cikarang, and building a new 28-floor office tower dedicated to port-related tenants called the Maritime Tower. All these projects are expected to be completed by 2019. To do all these improvements and projects, Elvyn says the company has budgeted Rp 11.6 trillion in capital expenditure, which will be financed from internal cash and partially from a $1.6 billion global bond issued in 2015.

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