Brief on ship building industry in Indonesia

Posted on 08 January 2020

Source: SEAISI
The shipping and marine industry in Indonesia is amongst the strategic industries and is a key steel consuming sector in the country. The Indonesian archipelagos, one of the world’s largest, comprises over 17,500 islands, and marine transportation between islands is becoming increasingly important. The Government’s mega projects, therefore, must include the expansion of ports and sea transportation to facilitate trade and commerce across the geographic landscape of the country. 
One of the medium-term national development as stipulated in the Medium-Term Development Plan for the period 2015-2019 was to bring Indonesia to an independent, strong and nationally interest-based archipelagic state. 
The mission is realized through the improvement of maritime perspective and the development of shipbuilding industry in the country. 
The new government continues its strategic plan to make Indonesia as the World Maritime Axis with projects to build new ports and to accelerate demand for ships in the country. 
Ship demand in Indonesia is mainly for small to medium size ships, namely, passenger ships, coastal ships, petrol vessels, tanker, military ships, container ships etc. 
Demand for ships in the country increased significantly to at least double in volume when compared to the last 4-5 years, along with the requirements from government’s projects and the new ports in some islands in the country and export to some countries, such as Philippines. 
Surprisingly, ship demand for fishing is not significant. A bulk of the demand for fishing ships is for small size ships or boats and most of them are made from wood. 
Although there is a significant increase in ships in the country, domestic shipyards still face the problem from import of second hand ships, especially from Japan and Korea. There is not much demand for imported ships from China due to concern over quality. However, there are some joint venture companies between Japan and China which could be a new competitor with cheaper price and good quality. 
State-owned shipyards basically look for domestic steel supply, especially hot rolled plate. However, there is still an import of other steel materials or parts such as profiles, flat bars, ankle bars since the volume is too small. 


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