Wednesday, Nov 07, 2012
By Linda Silaen
JAKARTA--A senior official at Dubai-based Drydocks World, a shipbuilding and repair firm, said Wednesday it may invest $150 million in Indonesia, tapping the Southeast Asian nation's drive to revamp its infrastructure.
Logistics costs can reach up to a third of total operation costs, Indonesian businesses said, in large part due to the country's outdated ports and roads.
There hasn't been any major infrastructure investment in the country since the Asian financial crisis in late 1990s. In recent years, however, infrastructure projects have started to kick off and more are expected to materialize in coming years.
In a country with more than 17,000 islands, "transport becomes critical to ensure the connectivity is good," Khamis Juma Buamim, chairman of Drydocks World, told reporters on the sidelines of an investment forum held in Jakarta.
The company is seeking opportunities in areas such as offshore oil and gas production and tourism industry, he said, adding that investment may amount to $150 million in Batam island near Singapore.
The company, a unit of government-owned Dubai World (DWORLD.YY), said in September that it was studying to form a joint venture to build warships and support vessels in Indonesia and other Southeast Asian countries.
Indonesia is ranked 59th in 2012 World Bank's Logistics Performance Index, improving from 75th in 2010, but still significantly behind neighboring Singapore and Malaysia which ranked 1st and 29th, respectively.
Thailand, the Philippines and Vietnam also fare better than the Southeast Asia giant, ranked 38th, 52nd, and 53rd. The index measures the perceptions of international freight doing business in a country.
--Andreas Ismar contributed to this article.
Write to Linda Silaen at linda.silaen@dowjones.com
(END) Dow Jones Newswires
07-11-12 1412GMT
