A combination of good economic growth and favourable regulatory changes could give the Indonesian shipping and ports sector a bit of a kick-start this year. Indonesian ship imports zoomed up in the first four months of 2010, rising by 90.6% year-on-year (y-o-y) to reach a total of US$815.2mn, according to Asia Pulse news agency. The increase was mainly due to purchases by PT Pertamina, the state-owned oil and gas company, which acquired two very large crude carriers (VLCCs) and three very large gas carriers (VLGCs). Local business sources said ship imports were rising because of Indonesia's cabotage programme, which from this year requires island-to-island domestic shipping to be carried out exclusively by Indonesian-flagged vessels. Government imports are also required to be carried by ships on the domestic registry. As a result many companies have been buying ships to replace foreign-flagged vessels. Indonesian GDP, which slowed to 4.5% growth in 2009, is, according to BMI's forecast, set to expand by 5.2% this year, gathering pace to 5.8% in 2011. Over the next five years we believe that annual GDP growth will average a strong 5.8%. Although Indonesia will benefit from improving world trade and a particularly healthy Asian regional economy, the bedrock of this growth will be the domestic market, giving the country an extra degree of resilience. There are some political clouds on the horizon, but on the whole the macroeconomic outlook for the ports and shipping sector is encouraging. In 2010 BMI projects that total tonnage handled at Tanjung Priok port on West Java will increase by 5.8% to reach 37.387mn tonnes, after the sharp recession of 2009, when volume slumped by 15.9%. For the next few years, held back by capacity constraints, we see tonnage at Indonesia's main port growing by 5-6% per annum, more or less in line with the expected rate of GDP expansion. At the smaller Port of Palembang in Sumatra, where tonnage slumped by almost half in 2009, we see a modest 4.3% gain this year to 6.11mn tonnes. In 2009 Indonesia's trade volumes slumped by 12.1% in real terms, reflecting the impact of the global recession. This year we see the country experiencing a fairly vigorous trade recovery, with the total rising by 9.1%. In the next five years we see trade growing in real terms by an average of 9.3% every year, well ahead of GDP. This in part reflects where Indonesia is located: part of emerging Asia, which will be one of the world's most vigorous economic sub-regions over the next few years. In nominal terms we see exports up by 29.2% this year to US$169bn, with imports surging by almost one-third - 30.9% - to US$151.3bn. Our central forecast for Indonesian ports and shipping is relatively bullish, so it is perhaps unsurprising that we believe the risks are on the downside. Two main risks stand out. First, although he has enjoyed a relatively good run so far, President Susilo Bambang Yudhoyono may find himself weakened by a series of corruption scandals, and this could distract and divide his ministerial team, slowing the pace of economic reforms. Second, a sharper than feared 'double dip' recession in China and the US in 2011 could also have a negative effect on growth and freight demand, even though we believe that Indonesia is relatively protected because of the size and resilience of its domestic market.

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Indonesia Shipping Report Q3 2010
Published on June 2010
Report Summary
A combination of good economic growth and favourable regulatory changes could give the Indonesian shipping and ports sector a bit
of a kick-start this year. Indonesian ship imports zoomed up in the first four months of 2010, rising by 90.6% year-on-year (y-o-y) to
reach a total of US$815.2mn, according to Asia Pulse news agency. The increase was mainly due to purchases by PT Pertamina, the
state-owned oil and gas company, which acquired two very large crude carriers (VLCCs) and three very large gas carriers (VLGCs).
Local business sources said ship imports were rising because of Indonesia's cabotage programme, which from this year requires
island-to-island domestic shipping to be carried out exclusively by Indonesian-flagged vessels. Government imports are also required
to be carried by ships on the domestic registry. As a result many companies have been buying ships to replace foreign-flagged
vessels. Indonesian GDP, which slowed to 4.5% growth in 2009, is, according to BMI's forecast, set to expand by 5.2% this year,
gathering pace to 5.8% in 2011. Over the next five years we believe that annual GDP growth will average a strong 5.8%. Although
Indonesia will benefit from improving world trade and a particularly healthy Asian regional economy, the bedrock of this growth will be
the domestic market, giving the country an extra degree of resilience. There are some political clouds on the horizon, but on the whole
the macroeconomic outlook for the ports and shipping sector is encouraging. In 2010 BMI projects that total tonnage handled at
Tanjung Priok port on West Java will increase by 5.8% to reach 37.387mn tonnes, after the sharp recession of 2009, when volume
slumped by 15.9%. For the next few years, held back by capacity constraints, we see tonnage at Indonesia's main port growing by
5-6% per annum, more or less in line with the expected rate of GDP expansion. At the smaller Port of Palembang in Sumatra, where
tonnage slumped by almost half in 2009, we see a modest 4.3% gain this year to 6.11mn tonnes.
In 2009 Indonesia's trade volumes slumped by 12.1% in real terms, reflecting the impact of the global recession. This year we see the
country experiencing a fairly vigorous trade recovery, with the total rising by 9.1%. In the next five years we see trade growing in real
terms by an average of 9.3% every year, well ahead of GDP. This in part reflects where Indonesia is located: part of emerging Asia,
which will be one of the world's most vigorous economic sub-regions over the next few years. In nominal terms we see exports up by
29.2% this year to US$169bn, with imports surging by almost one-third - 30.9% - to US$151.3bn.
Our central forecast for Indonesian ports and shipping is relatively bullish, so it is perhaps unsurprising that we believe the risks are
on the downside. Two main risks stand out. First, although he has enjoyed a relatively good run so far, President Susilo Bambang
Yudhoyono may find himself weakened by a series of corruption scandals, and this could distract and divide his ministerial team,
slowing the pace of economic reforms. Second, a sharper than feared 'double dip' recession in China and the US in 2011 could also
have a negative effect on growth and freight demand, even though we believe that Indonesia is relatively protected because of the
size and resilience of its domestic market.
Table of Content
Executive Summary .... 5
SWOT Analysis 7
Indonesia Shipping SWOT 7
Global Overview .... 8
Container Shipping Overview . 8
Dry Bulk Overview ... 15
Liquid Bulk Sector Overview 22
Industry Trends And Developments 28
Indonesia Shipping Report Q3 2010 Page 1/4

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Market Overview .. 33
Port Of Jakarta (Tanjung Priok) 33
Overview . 33
Terminals, Storage And Equipment .. 34
Expansions And Developments ... 36
Multi-Modal Links .... 37
Port Of Palembang .. 37
Overview . 37
Terminals, Storage And Equipment .. 38
Expansions And Developments ... 38
Multi-Modal Links .... 38
Industry Forecast 39
Table: Major Port Data, 2007-2014 . 39
Table: Trade Overview, 2007-2014 .. 40
Table: Key Trade Indicators . 41
Table: Indonesia's Main Import Partners, 2002-2008 (US$mn).. 42
Table: Indonesia's Main Export Partners, 2002-2008 (US$mn).. 42
Company Profiles 43
A.P. MØLLER-MAERSK 43
Mediterranean Shipping Company ... 50
CMA CGM .... 54
Evergreen Line ... 59
China Ocean Shipping (Group) Company (COSCO) 64
Hapag-Lloyd . 69
Neptune Orient Lines (& APL) ... 73
China Shipping (CSCL) .. 77
Nippon Yusen Kabushiki Kaisha (NYK) .. 81
Hanjin Shipping .. 85
Mitsui OSK Lines (MOL) 91
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