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Indonesian shipyard teams up with foreign firms to expand
Publication Date : 20-07-2014
State-owned shipyard PT PAL Indonesia plans to increase its production capacity by cooperating with foreign shipyards, including those in Jeddah, Saudi Arabia, and Hong Kong.
According to PAL’s production director, Edi Widarto, the move is in response to the increasing demand for vessels from domestic and foreign clients, intended both for commercial and military purposes.
“PAL’s board of directors will travel to Jeddah to finalise the planned collaboration. As of now, the plan is still under discussion,” Edy said, declining to provide more details.
Aside from the production deal, PAL is also seeking a funding deal from its partner shipyards, including in Hong Kong.
“If the Defence Ministry were to allocate three shipbuilding projects for the Navy every year, PAL’s maximum production capacity would be reached. Therefore, PAL needs to cooperate with other shipyards overseas to sustain its production of ships and meet the rising demand,” Edy added.
Indonesia's Deputy Defence Minister Syafrie Sjamsoeddin said the Navy needed up to 40 fast missile boats (KCR), each measuring 40 by 60 metres, to meet its minimal needs by 2024.
PAL Indonesia has just handed over one of three KCR-60 vessels to the Navy. The total cost of the entire project is estimated to be around 370 billion rupiah (US$35 million).
PAL is also in the middle of building two landing platform docks (LPDs) for the Philippine navy, with a price tag of up to $90 million.
Edy also said that PAL planned to build vessels for Myanmar and Turkey.
He explained that the collaboration with Myanmar was due to begin this month, but the company had yet to receive the formal orders.
“We have not received any information on what the countries need. Both Myanmar and Turkey have so far only expressed their interest in our production,” he said.
Meanwhile, for the domestic market, PAL is cooperating with several regional administrations to build ship-maintenance facilities.
The facilities will be built in Cilegon, Banten, and Lamongan, East Java.
To accommodate the project, the Cilegon administration has offered 50 hectares of land for the construction of one of the facilities.
“Building the facilities is, in itself, relatively easy. However, in order to do so, we need to reclaim some 400 metres of land from the sea. Added to that, the amount of materials needed to build the facilities is less than that needed to build new ships,” he said.
Cilegon is home to the busy and congested international port of Merak.
Furthermore, PAL has also been asked by the government to expand its operations to accommodate an oil and gas development project in Lamongan.
Aside from the military and commercial vessel projects, the company also deals with the construction of general engineering that focuses on developing offshore platforms.