The Industry Ministry expected the nation's political awareness of the maritime industry in the country. Because there has been only individual awareness that understands maritime issues, but a number of related agencies have not been able to realize them in a comprehensive manner. After officially opening lnamarine 2014 and InaGreenTech 2014 in Jakarta, on Tuesday (May 13), Vice Minister of Industry, Alex S.W. Retraubun, expected a more directed incentives so that Indonesia's position where 75% of it composes of oceans, can be good for the growth of the maritime industry.
"One of the issues highlighted is that importing ships turns out to be easier than building ships. However, if this trend continues, it will be difficult for the maritime industry in the country to grow. Therefore, if foreign investors enter Indonesia, they will know that the cost of importing ships is cheaper than building ships", he said, accompanied by the Director of Maritime, Aerospace, and Defense Equipment of the Ministry of Industry, Hasbi Assiddiq Syamsuddin.
According to Alex, with the high cost of ship building in the country which is estimated at trillions of Rupiah, it will be a bad incentive for the maritime industry. In order to stimulate the industry to grow better, the Ministry of Industry also needs to encourage the Ministry of Finance in order to facilitate the domestic monetary policy. "For example, the interest rate of credit for ship building should not be too high. It is important to develop not only the ship industry and its components, but also other industries.
Because as a consequence of industrial growth, which continues to be on top of economic growth, 90% of raw materials, either in the form of raw materials and auxiliary raw materials, have to be imported. In 2013, the non-oil & gas manufacturing sector grew 6.10%, higher than national economic growth which is 5.78%. These facts should be observed, so that the Ministry of Industry together with relevant agencies will seek to substitute import demand with domestically-produced ones. Moreover, the non-oil & gas manufacturing sector is still the largest contributor to the national economic structure with a contribution of 20.76%.
That is why I welcome the plan of the event organizers who take the theme of maritime industry as a key pillar of the economy. Because quoting the speech of the late President Sukarno, who hoped the Indonesian nation to become sailors, not just be a 'servant', but rather be a nation who has its own fleets and their preoccupations match the rhythm of the sea itself", said Alex.
Cultivating National Competitiveness
Chairman of Indonesian Shipbuilding and Offshore Association (IPERINDO), Tjahjono Roesdianto, suggested the need to foster the competitiveness of the national ship industry, among others, by the partiality to this industry. This is because almost 70% of raw materials for shipbuilding are imported. The ones coming from the country are only the workers and the steel plates that have been produced domestically. He expected that if we are able to build ships domestically, there should be a positive value for Indonesia.
"It means that we should not follow the automotive industry, where it is said that vehicles are made in Indonesia, but the engine and some components are imported from Japan. Indeed there is a number of ships that have been produced domestically, but for the tank technology, Indonesia has not been able to make it. For the high-tech ones, there is a few which Indonesia is unable to master, unlike ship repair which is entirely performed domestically", he said.
To build a ship requires a minimum time of one year. Moreover, the existing policies complicate the competitiveness of the domestic ship industry. The various components that enter the country, in addition to being subjected to VAT, it is subject to import duties and fiscal policy, which ultimately makes the businesses more interested in importing ships, including second-hand ships, into the country. But, based on calculation, if import duties and VAT were exempted, there is still a difference of 17-20%", he said.
Ministry of Industry data describes that currently the number of shipbuilding industry reached 250 companies, while production capacity of new building only reached 700,000 DWT, repair 10 million DWT, capacity of new building facility is up to 50 thousand DWT and repair up to 150 thousand DWT (graving dock). (E)
Business New - May 16, 2014