New contracts for the Indonesian shipbuilding have reached an all-time low in 2020. But Indonesian maritime experts, like Carmelita Hartoto foresee a strong recovery. When combined with Chinese solutions a larger number of Indonesian shipyards can benefit from this recovery.
Indonesian shipbuilding
About 80% of the Indonesian shipbuilding market consists of small and medium sized shipyards. Shipyards with production facilities up to 5 000 DWT. The rest of the market of commercial and naval ships is in the hands of PT PAL and PT Dok Dan Perkapalan Kodja Bahari.
The Indonesian maritime industry has the expertise to produce many different vessels as the table below shows. With the tugboat representing over half of the vessels driven by the local demand for inter-island transportation of bulk material. This domestic demand has made Indonesia the number one builder of tugboats (market share 27%), significantly above the number two China with a market share of 19%, or other regional players like Malaysia (12%) or Viet Nam (3%).
The difference from regional shipyards like Viet Nam and the Philippines, two thirds of the orders in Indonesia are originated by domestic ship owners. The Indonesian shipbuilding market supports the demand from ship owners in Singapore (8%), Nigeria (6%) Chinese Taipei.
Completions of seagoing vessels by ship type in Indonesia, 2011-2020
| Type | CGT(‘000) | % of total |
| Tug | 2 531 | 51.40% |
| Passenger | 846 | 17.20% |
| Offshore Service | 575 | 11.70% |
| Tanker | 444 | 9.00% |
| Other Dry Cargo | 317 | 6.40% |
| FCC (Fully Cellular Container) | 44 | 0.90% |
| Bulk Carrier | 37 | 0.80% |
| Buoy/Lighthouse Tender | 35 | 0.70% |
| Work/Repair Vessel | 33 | 0.70% |
| Others | 63 | 1.30% |
| Total | 4924 | 100% |
There is light at the end of the tunnel
The chairwoman of the Indonesian National Shipowners Association (INSA) Carmelita Hartoto believes that there will be an increase in national export activities in the non-container sector of coal and CPO. This will lead to higher demand for vessels and ships.
This potential recovery was supported by the coordinating minister for the Economy, Airlangga Hartarto, at the Virtual Expo Maritime Indonesia. He mentioned a 25% growth of the transportation sector.
At first the recovery will lead to more demand for bulk and other cargo, and this will be supported by an increase for vessel to allow these increased transportation movements.
Partnership- the Chinese solution
The Indonesian shipbuilding sector has been depending for a long time on Korean and Dutch shipyards, but a more natural partner is a Chinese partnership. Form various points of view a Chinese Partnership is a logical choice, China is the closest to Indonesia, reducing transporation costs and time and the Chinese can support innovative material for shipbuilding sector, at a much lower price level.
