Financing Regulation Package with a long tenor for Shipping Industry

The shipyard industry in the country is considered to have high competitiveness because it is able to produce quality products.

This is inseparable from the ability of human resources and the use of modern technology.

“The development of the shipyard industry is in line with the government’s determination to realize the sea highway, so it is expected to create a more efficient logistics flow, especially for the industrial sector. It can efficiently reduce logistics costs, “Industry Minister Agus Gumiwang Kartasasmita said during a working visit at the PT Afta Tehnik Mandiri shipyard, Makassar, South Sulawesi, Monday (02/10/2020).

The Minister of Industry revealed, shipyard industry human resources in Indonesia are already competitive with technicians or experts from abroad.

“For example, one that needs attention from the government, one of which is assistance with funding the production process,” he said.Because, besides being labor intensive and technology intensive, shipyard industry characteristics are also capital intensive.

“In building ships, they require very large costs, while the project cannot be guaranteed by the bank. In accordance with the mandate of the Industrial Law, the government needs to build the financial institution itself, “he explained.

The Ministry of Industry noted that the national shipping industry has made some progress, including increasing the number of shipyards to more than 250 companies with a production capacity of around 1 million DWT per year for new buildings and up to 12 million DWT per year for ship repairs.

“Going forward, we hope the production capacity for new buildings and ship repairs can continue to be increased,” said the Minister of Industry.

Moreover, the shipping industry or shipyard is one of the strategic sectors and has a vital role for the national economy. In addition, in order to realize the vision of Indonesia as the world’s maritime axis.

“Therefore, the government continues to encourage the growth of the shipyard industry in the country in order to meet the needs in the domestic market, even able to fill the export market,” said Agus.

Therefore, a conducive investment climate is an absolute requirement that is the concern of the government so that the operational sustainability and productivity of the shipping industry sector can be optimized.

Chairperson of the Indonesian Shipbuilding and Offshore Facilities Industry Association (Iperindo), Eddy Kurniawan Logam said, with an attractive financing scheme, it is expected that national private ship procurement projects can be developed domestically.

“Indonesia still acknowledges that the depreciation or the proper life of the ship is 25 years, if there is a financing regulation package with a long tenor, it will be a stimulus for the national shipping industry.

Support and recommendations:

High interest rates and very short loan periods have an impact on ship owners having to provide substantial funds for ship operations, this has an impact on many things, one of which is very low crew salaries, ship owners do not have reserve funds for ship maintenance, insurance premiums, so that if there is something with the ship will interfere with the entire operation of the company. this is the link that must be fixed. unfortunately sometimes the bank or leasing does not dare to reduce interest and loan period. there must be a willingness from the government to improve credit management for the maritime industry. By increasing the time period and lowering interest.

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