The Indonesian shipbuilding industry is set to benefit from IDR1.5trn ($156.6m) investments to build new yards and expand existing ones in areas including East and West Java, South Sumatra and South Sulawesi.

Just under half the investment, or about IDR700bn, will come from PT Daya Radar Utama and PT Dok dan Perkapalan Surabaya (DPS) to build shipyards in Lamongan, East Java, Budi Darmadi, the Industry Ministry’s chief for high-technology priority industries, was quoted as saying. And about IDR800bn would be spent by firms revitalizing facilities in several areas, including in Banten, Lampung and South Sulawesi.

The move is aimed at preparing local builders to benefit from cabotage rules that may spur new orders. Companies such as state oil and gas firm Pertamina are expected to need new tankers and will be encouraged to build locally.

The industry has some way to catch up however. DPS, for example only just delivered last month a 6,500-dwt tanker that was ordered by Pertamina in 2008.

The government has the goal of getting these yards to build up vessels of up to 70,000 dwt within five years and to handle 150,000 dwt vessels within 10 years. With current capabilities, local shipyards can only repair vessels under 150,000 dwt and build ships with a capacity ranging from 30,000 dwt to 45,000 dwt. And within three to four years they are expected to be able to manage CNG and LNG carriers.

(Source:seatrade asia online)