2013-02-02 16:00:32 - Fast Market Research recommends "Indonesia Shipping Report Q1 2013" from Business Monitor International, now available
BMI View: Positive Outlook, Forecasts Fine-Tuned
We have modified our outlook for the Indonesian economy in 2012 and 2013. We have raised our growth estimate for 2012 on the strength of better-than-expected data, but reduced the forecast for 2013 because we see hints of overheating, so expect a more restrictive monetary policy. We now see growth of 6.0% in 2012, easing back to 5.6% in 2013. It has to be noted, however, that in relative terms Indonesia remains a regional out-performer, so even taking into account these adjustments, the macro-economy is supportive of the ports and shipping industry.
We continue to think that the key to sustainable growth is investment in port infrastructure, including road and rail links in the hinterland areas.
We are encouraged that after many delays, Indonesia Port Corporation II (IPC) announced in 2012 that it will invest US$2.47bn to develop an extension Tanjung Priok port in North Jakarta. This was followed in Q412 by news of wider investments in the country's ports.
Full Report Details at
- www.fastmr.com/prod/529366_indonesia_shipping_report_q1_2013.asp ..
Headline Industry Data
* 2013 Tanjung Priok total tonnage forecast to grow 5.2% to 51.660mn tonnes, with average growth of 5.5% expected over our forecast period to 2017.
* 2013 Palembang total tonnage forecast to grow 3.3% to 11.445mn tonnes, with average growth of 4.0% over our forecast period.
* 2013 Tanjung Priok container throughput forecast to grow a strong 9.0% to 6.465mn twenty-foot equivalent units (TEUs), with average growth of 10.0% over our forecast period.
* 2013 Palembang container throughput forecast to grow 5.1% to 95,316TEUs, with average growth of 6.1% over our forecast period.
Key Industry Trends
Indonesia Could Become 'Automobile Hub' But Needs Port Investment
The country could become a key South Asian automobile production and trade hub, but requires investment in port infrastructure if it is to seize this opportunity. That was the implication of new BMI analysis. We believe the rapid and timely expansion of the Tanjung Priok car terminal will be critical. The port is a key route for Japanese car exports to other emerging markets in Asia, Africa and the Middle East. It is projected to handle 320,000 units in 2012 and 535,000 units in 2013, more than its current intended capacity of 265,000 units. The current delays in export shipments (due to the stretched capacity) might turn off other automakers from setting up production facilities in the country as they do not want to be sitting on unshipped inventory, which is falling in value.
Theft And Piracy Warning From The IMB
The International Maritime Board has warned that: 'the Indonesian authorities should pay greater attention and rapidly respond to increasing armed robberies at Indonesian ports. Otherwise, this will disturb national and international shipping.' The warning got a mixed reception in Indonesia itself. The Indonesian Seafarer's Association recognised that there was a problem, but the National Sea Security Coordination Board stressed that Indonesian ports were 'relatively safe' and pointed out that developed countries were also prone to robberies affecting shipping and ports.
Pelindo II Looks At Investing In Panjang Port
Indonesia's state-owned port operator Pelabuhan Indonesia II (Pelindo II) is further developing the Panjang Port in Lampung in a bid to upgrade it into an international port, as an alternative to Tanjung Priok Port in Jakarta. Apart from upgrading port facilities and equipment for improvising services and work productivity, Pelindo II will also revive the railway track from Pidada to Panjang Port. Panjang Port is likely to offer zero waiting times in the near future with the modernisation of equipment and port infrastructure, PT Pelindo II general manager Doso Agung said.
Key Risks To Outlook
We still warn that there are downside risks to our ports outlook. Despite a degree of insulation, Indonesia remains exposed to any faster-than-expected slowing of China's growth boom. Should such a scenario play out, we believe that Indonesia would suffer, as was the case in late 2008. However, we do not believe the negative impact on growth would be as harsh as was seen during the global financial crisis of 2009.
A second downside risk to our outlook is the possibility that some of the current projects to expand port capacity might suffer a high-profile setback, such as a legal dispute or allegations of corruption. Any such development might damage the gradual improvement in investor perceptions of Indonesia that has taken place over the last few years. More specifically, it would lead to delays in the much-needed drive for modernisation.
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