Friday, June 14, 2024

Rhenus shows interest in Nusantara new capital project

Reading Time: 2 minutes
Imanuddin Razak

Journalist

yan

Editor

Interview

Rhenus Logistics Indonesia has shown interest to take part in Indonesia’s megaproject to relocate its capital from Jakarta to Nusantara new capital (IKN) in East Kalimantan. The company, which is part of the German-based Rhenus Group, plans to use its expertise in domestic seafreight movements for the project.

Rhenus Group is one of the leading logistic specialists with an annual turnover of €7 billion and 970 business sites around the world. In Asia Pacific, the group spreads its business in 14 countries, including Indonesia. Currently, Rhenus Indonesia has four offices in Jakarta, Semarang, Surabaya and Medan.

Interest in new capital project

“It [the capital relocation] is a decades-long project, where we see increased domestic freight and international freight opportunities,” Rhenus Group CEO Tobias Bartz told journalists, invited by the Konrad Adenauer Stiftung, on the sideline of the Asia-Pacific Conference of German Business in Singapore on November 14, 2022.

“This is especially true for project based business related to construction of the new capital to support moving government administration functions to the area.”

“In the short run, Rhenus Indonesia will certainly be able to use its expertise in domestic seafreight movements and in the long run international freight as Nusantara’s local economy expands its renewable energy and tourism markets,” he added.

Read also: Indonesia develops green energy for new capital city

President Joko Widodo decided to relocate the capital city from the metropolis Jakarta to Nusantara, located in underdeveloped Sepaku district in North Penajam Paser regency, East Kalimantan. The US$ 32 billion megaproject already received doubts that it would materialize due to uncertainty over funding.

The 265.14-hectare Nusantara, which means the “archipelago”, will house state institutions and 1.5 million civil servants, who are scheduled to conduct their services beginning 2024.

Opportunities in Indonesia

Bartz explained that Rhenus had very aggressive growth plans. The company is continuing organic growth in existing markets with an aim to double in size by 2025.

“Rhenus Indonesia has been preparing for this by developing a solid organizational structure to support expanding our local footprint. We are seeing growing interest in the eastern part of Indonesia, specifically Sulawesi,” he said.

Bartz said the government has been implementing systematic infrastructure improvements in Makassar, the capital of South Sulawesi, and setting up special economic areas in the island to promote business growth.

Statistics Indonesia (BPS) and Supply Chain Indonesia (SCI) estimated that in 2021, the logistics sector contributed IDR 676 trillion to Indonesia’s gross domestic product (GDP). SCI predicted that in 2022 the logistics sector will see a 1.08% growth over 2021. It is estimated that the market value of the sector will reach IDR 699.1 trillion.

Challenges

According to Bartz, the company has been facing challenges in doing business in Indonesia. Among them are a challenging infrastructure for domestic inter-island movements, complex tax regulations that affect the logistics industry and the move towards carbon neutral solutions within Indonesia.

He also mentioned that cross country legislation was one of the challenges. As a comparison, he said the customs in Singapore, Malaysia and Thailand already have worked well in dealing with cross country logistics.

Apart from these challenges, Indonesia had been facing lack of containers which caused delays in delivery, as mentioned by Minister of State-Owned Enterprises (BUMN) Erick Thohir in 2021. Thohir said that global trade pressure due to the implementation of a number of trade war protectionism policies and increased taxes as another challenge.

Editor’s note: The article has been updated.

Imanuddin Razak

Journalist

yan

Editor

 

Interview

SUBSCRIBE NOW
We will provide you with an invoice for your reimbursable expenses.

Free

New to Indonesian market? Read our free articles before subscribing to the premium plan. If you already run your business in Indonesia, make sure to subscribe to the premium subscription so you won’t miss any intelligence & business opportunities.

Premium

$550 USD/Year

or

$45 USD/Month

Cancelation: you can cancel your subscription at any time, by sending us an email inquiry@ibp-media.com

Add keywords to your market watch and receive notification:
Schedule a free consultation with us:

We’ll contact you for confirmation.

FURTHER READING

PT Perusahaan Listrik Negara (PLN), Indonesia’s state-owned electricity company, has announced plans to construct three new wind power plants (PLTB) − PLTB Timor, PLTB Tanah Laut, and PLTB Sulbagsel − by 2027 with a combined capacity of 152 MW.
Bali will introduce a Light Rail Transit (LRT) system following the completion of the feasibility study for the project. The initial phase of the LRT will feature a track stretching from Ngurah Rai Airport to the Sunset Road area.
SKK Migas reveals that China has expressed interest in utilizing Enhanced Oil Recovery (EOR) technology to rejuvenate Indonesia’s aging oil fields, potentially boosting production and reserves significantly.
Minister Sakti Wahyu Trenggono, says Indonesia’s vast marine biodiversity remains largely unmapped and underexplored, missing out on significant opportunities for marine biopharmacology.
President Jokowi announced a major boost in foreign investment for the Nusantara Capital City (IKN), following his recent visit to oversee groundbreaking projects and inaugurate key infrastructure in the country’s new capital city.
A number of MoU with a total investment of Rp862 billion (US$53 million) were signed at the 2024 International Tourism Investment Forum (ITIF) regarding a number of tourism infrastructure projects with a number of companies.