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Maersk eyes investment in the Indonesian logistics sector

Maersk eyes investment in the Indonesian logistics sector
Maersk Line's logistics arm Damco, is considering investing in a cold storage facility in Indonesia if the government follows through with its plan to open the business to foreigners and map out a clearer plan on its ambition to become a global maritime hub, local reports said.

Media quoted Maersk Line Indonesia president director Jakob Friis Sorensen, as saying that Damco "might look at cold storage," backed by bullish expectations of Indonesian President Joko Widodo's maritime ambitions.

Still, he noted that the government's vision, which was first pledged during Joko's presidential campaign, remains vague and needs more fine-tuning in terms of planning.

"Otherwise, some of the partners or customers of Maersk Line might [open a cold storage facility] as it's adjacent to the fishing industry," he said.

Indonesia Investment Coordinating Board, or BKPM, recently announced that the government may allow foreign companies to wholly-own a cold storage facility in Indonesia as part of its ongoing revisions to the country's investment guidelines. Foreigners may soon be able to own up to 67% in transport supporting services, such as maritime cargo handling and ground handling, according to the transport ministry.

The revisions, which are part of the government's greater plan to attract more foreign business, have so far passed through at the ministerial level, with the first part of the revision expected to roll out in the next few days.

Maersk is also apparently setting its sights on port development in Indonesia, being among the first companies to bet on the government's maritime mission by opening a direct international route to the eastern port of Bitung, North Sulawesi, from Tanjung Pelepas, Malaysia, in 2014.

In October last year, Maersk went on further to sign an agreement with the government to help them in improving cargo flows in the Bitung port, which is expected to be among Indonesia's strategic ports with a special economic zone.

Sorensen said that the company is budgeting approximately $500,000 in the pilot project, which it hopes will help Maersk to open the path for future investment in Indonesia.

"The whole key is that once we can prove things are working, we want to replicate together with the government to other ports," Sorensen said.