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Humpuss looking to expand LNG business, diversify into dry bulk

Humpuss looking to expand LNG business, diversify into dry bulk
Indonesia's Humpuss Intermoda Transportation faces a grim outlook this year with no new contracts possibly until next year, as the company is still working to diversify its business as the shipping industry slows down, local reports said.

Humpuss Intermoda Transportation president director Theo Lekatompessy said his company is currently looking to diversify its business amid dwindling liquefied natural gas (LNG) shipping — the company’s main revenue generator.

However, possible expansion plans might begin only in the last quarter of this year, he added.

Theo said his company was looking to broaden its grip in the LNG industry, from only gas shipment to gas procurement, gas storing as well gas processing, thus boosting the revenue per ship, since formerly ships were only performing one function but under this new plan will be performing four functions at once.

Another possible project is to expand its bulk carrier business to support the government’s maritime highway project, which will also guarantee income from acquiring and selling sand.

“However, LNG diversification will depend on our tender project next year, while the bulk carrier project might only start in the fourth quarter of this year,” he said.

This situation leaves the company with idle second and third quarters.

Theo said that to date, the company had yet to secure any project tenders. The only tender the company is currently in is the state electricity company PLN’s tender to supply gas to independent power producers (IPP) across the country, valued at $30m to $50m a year.

According to him, if Humpuss manages to secure the contract, the company will dominate around 70% of the LNG shipping market in the country.

The tender for the project, however, is still in its pre-qualification stage, and results will only be announced next year, leaving Humpuss with no concrete project to handle this year.

Humpuss was aiming to boost its revenue by about half from $66m last year, to $100m this year, but due to the country’s unfavorable macroeconomic conditions leading to a slower market, Theo said the company expected to see its top line grow by only 10%.

Earlier this week, shipping and logistics firm Samudera Indonesia said it was planning to expand its shipping terminal businesses to diversify and is now planning an initial public offering (IPO) for its subsidiary, Samudera Indonesia Terminal, the company’s holding company for all its shipping terminal businesses.