Indonesian Economic Overview Indonesian Archipelago

• Total area + 1.9 million square km, 2/3 is covered by water • 95,181 km of sea line the 4th longest in the world after Canada, USA and Russia • Approximately 17,480 islands separated by sea

INTERISLAND CARGO MOVEMENT

TARAKAN TOLI-TOLI BITUNG BATAM

GORONTALO

MANOKWARI

SAMPIT KUMAI

NABIRE BAU-BAU

TIMIKA

• Economic growth increases trade activities and volume of interisland seaborne cargo • This given geographic condition creates high dependency for sea transportation

INDONESIAN MAIN PORTS

SUMATERA :

JAWA :

KALIMANTAN :

PAPUA – KEP MALUKU :

1. Sabang 2. Belawan 3. Dumai 4. Batu Ampar 5. Sekupang 6. Kabil 7. Lobam 8. Tg. Balai Karimun 9. Teluk Bayur 10. Tua Pejat 11. Palembang 12. Panjang

13. Bojonegara 14. Tg. Priok 15. Tg. Intan 16. Tg. Emas 17. Tg. Perak

20. Pontianak 21. Balikpapan 22. Sampit 23. Banjarmasin 24. Mekar Putih

28. Ambon 29. Ternate 30. Sorong 31. Jayapura 32. Merauke

BALI – NUSA TENGGARA : 18. Benoa 19. Tenau Kupang

SULAWESI : 25. Makassar 26. Pantoloan 27. Bitung

PIONEER TRADE ROUTES

YEAR 2005 2006 2007 2008 2009 2010 2011

WEST INDONESIA 6 11 11 11 11 11 11

EAST INDONESIA 42 41 42 45 47 49 50

NUMBER OF TRADES 48 52 53 56 58 60 61

• 30 main ports and 423 supporting ports • Pelayaran Perintis (pioneer trade routes) serves remote, isolated, and less developed areas/regions which is run by the government and non commercial

TRAFFIC PROJECTION AT INDONESIAN PORTS (million)

COMMODITIES

UNIT

2010

2020

2030

CONTAINERS

TEU

10

21

42

GENERAL CARGO

MT

14

25

43

COAL

MT

252

468

500

PETROLEUM PRODUCT

MT

12

40

107

CPO

MT

21

32

40

IMPLICATION OF TRAFFIC PROJECTION 2020 CONTAINER TRAFFIC WILL BE DOUBLED THAN 2009 VOLUME

2030 CONTAINER TRAFFIC WILL BE DOUBLED THAN 2020 VOLUME

CONTAINER TERMINAL CAPACITY EXPANSION AND DEVELOPMENT URGENTLY NEEDED TO PREVENT CONGESTION

LESS GROWTH OF LIQUID AND DRYBULK CARGO TRAFFIC COMPARE TO CONTAINER RESULTING IN ONLY 50% TOTAL CARGO GROWTH IN 2020 AND ANOTHER 50% IN 2030

BULK TERMINAL CAPACITY EXPANSION AND DEVELOPMENT NEEDED

Indonesian Economic Overview

• Indonesian Shipowner Characteristics – Majority Indonesian shipowners operate their own vessels – Indonesian law required vessel registered owner as single entity – Most of Indonesian shipowners are member of INSA (Indonesian National Shipowners’ Association)

Indonesian Economic Overview THE GROWTH OF INSA MEMBERS

2011 (1.168) 1999 (747)

2009 (1.064)

1989 (306)

*As per March, 2012 INSA has 1.238 member companies

2012* (1.238)

THE GROWTH OF SHIPPING COMPANIES 2.477 2.500

2.273 2.140 1.982

2.000

1.591

1.704

1.831

1.500

1.000

500

0

2005

2006

2007

2008

2009

2010

NUMBER OF SHIPPING COMPANIES

2011

THE GROWTH OF SHIPPING COMPANIES 2.477 2.500 2.450

204 unit (8,97%)

2.400

unit vessel

2.350

2.273

2.300 2.250 2.200 2.150

2010

2011

Sources : Bisnis Indonesia, 20th March 2012

• Based on Shipping Licenses (SIUPAL) issued by Sea Com DG - Ministry of Transport, Republic of Indonesia, the number of shipping companies in Indonesia as per October 2011 is 2.477 units

NATIONAL SHIPPING COMPANIES LISTED IN IDX 18 18 16 14 12

Units

10 8

7 5

6 4 2 0

2000

2005

2012

Number of national shipping companies listed in the Indonesian Stock Exchange increased 280 % from 5 companies in 2000 to 18 companies in 2012 (including those consolidated in respectives holding companies)

LIST OF SHIPPING COMPANIES LISTED IN IDX No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Company PT Berlian Laju Tanker Tbk PT Rig Tenders Indonesia Tbk PT AKR Corporindo Tbk PT Mitra Internasional Resources PT Samudera Indonesia Tbk PT Tanah Laut Tbk PT Arpeni Pratama Ocean Line Tbk PT Ancora Indonesia Resources Tbk PT Radiant Utama Interinsco Tbk PT Humpuss Intermoda Trans Tbk PT Elnusa Tbk PT Trada Maritime Tbk PT Pelayaran Tempuran Emas Tbk PT Wintarmar Offshore Marine Tbk PT Mitrabahtera Segara Sejati Tbk PT Buana Listya Tama Tbk PT Indo Straits Tbk PT ABM Investama Tbk

Source: Indonesia Stock Exchange

ID BLTA RIGS AKRA MIRA SMDR INDX APOL OKAS RUIS HITS ELSA TRAM TMAS WINS MBSS BULL PTIS ABMM

Activity Transport - Marine Transport - Marine Distribution/Wholesale Transport - Marine Transport - Marine Infrastructure, Utilities and Transport Transport - Marine Petrochemicals Oil Comp-Explor&Prodtn Transport - Marine Oil-Field Services Transport - Marine Transport - Marine Transport - Marine Transport - Marine Transport - Marine Transport - Marine Diversified Operations

Registered 26-Mar-90 26-Mar-90 Sep-94 30-Jan-97 05-Jul-99 17-Mei-01 22-Jun-05 29-Mar-06 12-Jul-06 15-Des-07 06-Feb-08 10-Sep-08 31-Des-09 29-Nov-10 06-Apr-11 23-Mei-11 12-Jul-11 06-Des-11

• At least 11.1% of current total national fleet is aged more than 30 years therefore in need for rejuvenation • In 2009 there are 513 vessels aged 35 years and above • In 2009 more than 37 financial institutions financed 201 unit vessels procurement in the amount of USD 525 mio + JPY 850 mio + SGD 1,1 mio • The growth of domestic cargo needs additional tonnages. As per end of 2010 there is still 1.9% of domestic cargo carried by foreign vessels • The growth of international cargo as per end of 2010 only 9.1% of +/560 million tons per annum is carried by national vessels • Study on public ship finance and shipping industry by consultant SRG and SAP stated that in 2014, there are need for various type of vessels 1,076 units, 521 units for replacement of old tonnage and 555 units for fresh tonnage • Estimated ship financing required USD 2.7 – 3.38 Bio

NUMBER OF INDONESIAN FLAG VESSELS 10,872 vessels

12.000

10.872 10.500

Unit Vessel

9.000

4.831 units (80 %)

7.500

6.041 6.000

> 14 mio GT

4.500 3.000 1.500 0

No. of Ships

31st March 2005 6.041

30th Nov 2011 10.872

> 17 mio DWT

• Number of vessels as per 30st November 2011 are 10.872 units (14,59 mio GT) • Number of vessel as per 31 March 2005 are 6.041 unit (5,67 mio GT) • Therefore there increasing number of vessel 4.831 units (80%) with total tonnage 8,92 mio GT (157,32%).

NATIONAL vs FOREIGN VESSELS Vessels operated (by ownership) after implementation of cabotage 10.000 8.165

9.000

Number of Vessels

9.945

9.164 7.154

6.428

8.000 7.000 6.000 5.000 4.000 3.000 2.000

1.448 1.154

1.000

977 865

-

691

2006 2007 2008 2009

National

2010

Foreign charter

Year

Source : Indonesia Ministry of Transportation, Transportation Statistic – Book 1, 2010

DOMESTIC CARGO MOVEMENT Volume of domestic cargo transported by Indonesian and foreign vessels after implementation of Cabotage 400 358

350 303

300

258

250

193 200

149

135

Foreign Shipping Line (in mio tons)

150 100

85

79

50

50

Indonesian Shipping Line (in mio tons)

28

-

2006

6 2007

2008

2009

2010 2020 (forecast)

CHALLENGES & OPPORTUNITIES • The growth of Indonesian flag vessels has outpaced the growth of shipyards • Less developed port facilities in eastern parts of Indonesia where most of the abundant natural resources are located

CONCLUSION • In spite of the current global shipping downturn, the Indonesian shipping industry is still promising

Thank You Bani M Mulia March, 2012

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