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Indonesia expects $34m in shipbuilding investments this year

Indonesia expects $34m in shipbuilding investments this year
Indonesia's Investment Coordinating Board (BKPM) expects some IDR500bn ($34m) of investments to come into the shipbuilding industry by the end of the year ahead of booming domestic demand following the government’s to prioritise locally produced vessels, local reports said.

BKPM head Franky Sibarani said investments in principle worth some IDR1.7trn had been issued as at June and he expected at least a third of these to be realised by the end of 2015. As at June, IDR153bn in committed investments had been realised, he added.

There have already been commitments from several ministries, institutions, state-owned enterprises (SOEs) and private companies to absorb locally produced ships.Investment commitments to the industry last year totalled IDR1.62trn last year and of this IDR210bn was realised. Franky noted that several investors would likely start their projects this year. “Chinese investors will invest around $50m, and around $150m from Australia. However, the Taiwanese have not made final decisions yet as they are still determining their project locations,” he said.

“The government has agreed to focus on the upstream industry producing ships to fulfill the future demand,” he said, adding that some new companies had started their businesses with maintenance and repair before expanding into shipbuilding.