Domestic Shipbuilding Industry Absorbs Large Number Of Workers: BKPM

Jakarta (Antara Bali) -- The National Investment Coordinating Board (BKPM) has lauded the government's policy to procure ships from domestic shipbuilding industries to enable them to boost their utility and directly absorb a considerable number of workers.

The current utility of the shipbuilding industry is around 40 percent, and the industry now employs some 60,000 people, Head of the BKPM Franky Sibarani said in a statement here on Tuesday.

"According to a rough calculation, every investment worth US$1 million can create new direct employment opportunities for 75 workers and indirect employment opportunities for 300 others. Currently, we are guarding interests to invest some US$9.3 billion in the shipbuilding sector, which has the potential to absorb 700 thousand workers directly," he explained.

The nation needs more than one thousand ships within the next five years, he added.

As many as 619 ships are needed to support the government's sea toll program, and the Transportation Ministry is estimated to procure 365 ships, including pioneer ships, patrol ships, and ships for navigation and inspection.

"These do not include demands from the sectors of oil and gas, fishries, etc.," he noted.

Moreover, in the long term, the national shipbuilding industry is expected to help increase the country's exports, Sibarani pointed out.

Indonesia's potential to become a major player in the global shipbuilding industry is considerable, given that the country's market share is only 0.3 percent as compared to the 2.6 percent share of the Philippines and 1.1 percent share of Vietnamt, the BKPM head stated.

China is a major ship exporter with a global market share of 41 percent, while South Korea's share is 33 percent, and Japan's, 18 percent.

According to Sibarani, the Indonesian shipbuilding industry faces a number of issues related to financial aid from banks, fiscal incentives, and licensing.

In addition, the investment coordinating board is planning to develop a licensing integration mechanism in shipyard regions such as Lamongan in East Java province and Tanggamus in Lampung province, he affirmed. (WDY)