about us
07 November 2016

Indonesia Aspires to Become Asia Pacific's Logistics Hub

The number of bonded logistic centers in Indonesia has doubled to 28 in the last six months, proving that the country is on the right track to become the Asia-Pacific region's main logistics hub.

"The development is really fast. It pictures how the added value or the function of bonded logistic centers have really affected the companies," Finance Minister Sri Mulyani Indrawati said on Wednesday (19/10).

A bonded logistic center, known as a PLB, is used to store products from foreign customs zones or from within Indonesia before it can be exported or distributed elsewhere, allowing importers or exporters to have storage for their items close to the port or their customers but defer duty payments until the goods leave the zone.

Indonesia previously relied on overseas storage, especially for fuel.

Bonded zones, according to Sri Mulyani, offers more flexibility for businesses and can cut a company's logistics costs by up to $5 million annually.

Chief Economic Minister Darmin Nasution, Finance Minister Sri Mulyani and the Finance Ministry's director general of customs and excise Heru Pambudi symbolically issued permits to 17 companies to operate PLBs during the opening ceremony of the Indonesia Transport Supply Chain and Logistics 2016, and Jakarta International Summit and Expo 2016 in Kemayoran, Central Jakarta, on Wednesday.

President Joko "Jokowi" Widodo inaugurated 11 PLBs in March, bringing the total in the country to 28 so far.

"I was once worried that [the PLBs] will only be available in Jakarta and its surrounding areas, but the facilities are now available on Java Island, Sumatra and Kalimantan," Minister Darmin said. "The availability [of PLBs] has a big impact in supporting economic activity, both exports and imports."

However, Indonesia still has a long way to become the Asia-Pacific region's main logistics hub. According to the World Bank's Logistics Performance Index — a comprehensive measure of the efficiency of international supply chains — Indonesia ranks 63 out of 160 countries, citing a lack of infrastructure and inadequate international shipments, logistics quality, competence and customs service.

Darmin hesitated to predict when Indonesia could become Asia's biggest hub as it "is heavily affected by the speed of infrastructure development."

"We already have hubs in Kuala Tanjung in the eastern part of the country, Bitung and Sorong in the eastern part [...] So, becoming a hub is not just a dream, because we have the potential," he said.


Source: http://jakartaglobe.id/business/anti-ahok-protests-wont-disturb-indonesias-economy-bank-indonesia/