50 new logistics centers to open in 2017: minister

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Porters walk past containers at Priok port, Jakarta. President Joko Widodo hopes to cut logistics costs by building 11 bonded logistics centers this year, with 50 more to follow next year. (Antara/M. Agung Rajasa)

The government intends to open 50 more bonded logistic centers (PLBs) in Indonesia next year. The new PLBs are part of an effort to transform Indonesia into an emerging logistics hub in the Asia-Pacific and are a follow up to the 11 logistic centers to be inaugurated in 2016.

The PLBs were developed as part of the implementation of a second economic policy package and expected to serve as a distribution center or warehouse for imported basic material. In this way, logistics costs will decrease significantly, said Finance Minister Bambang Brodjonegoro in Jakarta on Thursday.

‘€œThis year, we want to complete the 11 PLBs and synchronize the system with Custom and Excise Office. Next year we are targeting 50 more PLBs. With these 50 companies, in the next two to three years, we expect Indonesia to become a logistics hub,’€ he said.

As the upgraded version of bonded warehouses, Bambang further explained, PLBs provide increased benefits such as a longer storing period of up to three years, compared to a bonded warehouse which only stores materials for one year,

Secondly, he said, the PLBs are allowed to stock inventories owned by other companies. Meanwhile, a bonded warehouse was only allowed to store items stored by the bonded warehouse owner. Third, PLBs can store overseas goods, owned by companies abroad in Southeast Asia.

This year, there will be 11 PLBs built. One of them, owned by Cipta Krida Bahari, was inaugurated by President Joko ‘€œJokowi’€ Widodo on Thursday. Another, currently being built by Petrosea and Pelabuhan Panajam in Balikpapan, will specifically serve the oil and gas industry.

Kamadjaja Logistics is building a food and beverage industry PLB in Cibitung, Toyota Motor Manufacturing Indonesia is preparing a automotive industry specific PLB in Karawang, and Gerbang Teknologi Cikarang will develop a PLB in Cikarang to serve the textile industries.

Agility International is developing personal care and home-care industry PLB in Halim, while Dunia Express has committed to develop two PLBs, located in Sunter and Karawang, to serve the textile industry.

Lastly, for synthetic supporting industry, Vopak Terminal will develop a PLB in Surabaya, Dahana will develop its PLB in Subang for the oil and gas industry, and Khrisna Cargo is constructing two PLBs in Benoa and Denpasar for small medium enterprises (SME) industry.

Indonesia’s logistic costs are currently two-fold higher than that of Singapore and Malaysia.

“If we want to buy goods, we have to go to another country. The production is in Indonesia but the warehouse is abroad. With PLBs, logistics costs will be cheaper because we can save on transportation cost,” said Jokowi after the inauguration ceremony for Cipta Krida Bahari’€™s bonded logistics services

Source: 50 new logistics centers to open in 2017: minister