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DP World and INA to invest US$7.5 billion in Indonesia’s port infrastructure
The Indonesia Investment Authority (INA) signed a strategic alliance agreement with DP World to enhance Indonesia’s maritime and port sector within the global manufacturing ecosystem. The economic value of this partnership could reach up to $7.5 billion over the long term.
This partnership will improve the operation of ports, reduce logistics costs, and advance national competitiveness.
As a global leader of data-driven logistics expertise and global infrastructure, Dubai-based DP World will bring world-class technology and best practices to develop new port terminals and assets, enabling greater shipping efficiency and enhancing inter-island and international connectivity.
DP World and INA will form a consortium and working team to explore investments into the logistics infrastructure in Indonesia, including hinterland investments, inland terminals, cargo parks, feeder network systems, landside transport, and industrial zones. They will also explore collaboration with the Indonesia Port Corporations (Pelindo). DP World will seek to leverage its joint investment platform with Caisse de dépôt et placement du Québec (CDPQ) which since its launch in 2016 has invested in 12 port terminals globally across various stages of the asset lifecycle.
INA’s Chief Executive Officer, Ridha Wirakusumah, said this strategic partnership with DP World aligns with INA’s mission to optimise investment in Indonesia’s infrastructure and resources to deliver long-term economic development. INA's investment focuses on several key sectors, such as airports, ports, toll roads, industrial estates, digital infrastructure, healthcare services, and renewable energy.
Indonesia is the largest archipelago in the world with more than 17,000 islands. Its vast geography makes it reliant on a strong domestic shipping network. Despite historically trailing neighbouring countries in containerization rate and currently facing issues of high logistics costs, Indonesia is already among the top 15 countries in terms of container traffic and has much potential to grow further. Furthermore, containerization rate in Indonesia will only increase given the burgeoning domestic consumption and production.
“Indonesia’s maritime and port sector is key to support trade and consumption across the archipelago, and this collaboration with DP World will enable us to resolve issues of high logistics costs and port inefficiencies. Following INA’s rigorous partner selection process, we are confident that DP World can work well with us to create a strong domestic shipping network and add value to investors, businesses and employees. We would like to extend our gratitude to the Ministry of State-Owned Enterprises, Ministry of Finance, Ministry of Transportation, other government agencies and Pelindo for their strong support,” said Mr Wirakusumah.
DP World Group Chairman and CEO H. E. Sultan Ahmed Bin Sulayem said, “DP World recognises the vast potential of Indonesia as one of the fastest-growing economies in the world, as well as projects undertaken by the government to improve port facilities. Through our partnership with INA, we are committed to supporting national initiatives that create value and bring in expertise to modernise the Indonesian maritime infrastructure.”
DP World CEO & MD Asia Pacific and Australasia Glen Hilton said, “Together with INA, we will focus on building mutually beneficial relationships with local governments and stakeholders to create value across Indonesia’s supply chain. By combining our experience and disruptive technology with INA’s mandate to maximise economic impact, we are optimistic that we can elevate Indonesia’s supply chain performance.”
DP World will also introduce its global best practices to Indonesia, including operations optimisation, service innovation, disruptive technologies, and safety principles. Cutting-edge logistics technology includes fully automated stacking to eliminate inefficiency, hyperloop systems for fast cargo delivery, and 100% electric sustainable means of cargo transport.