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tate shipyard and engineering company PT Dok dan Perkapalan Kodja Bahari (DKB) plans to angle itself more toward ship repairs and has announced it will relocate its shipyard to Batam so that it can serve more ships.

DKB president director Riry Syeried Jetta told reporters Wednesday that the company had decided to focus on its ship repairs business because it was more feasible than ship building.

“Constructing a ship is important for our company, but the repairs business is also feasible. We will figure out which business is more feasible for us,” he said in Jakarta.

The company expects its ship repair business will contribute 50 to 60 percent of DKB’s total revenue this year. “Last year, the ship repair business only contributed 30 to 40 percent of revenue,” he said.

DKB recorded a net profit of
Rp 21 billion (US$2.35 million) last year, lower than Rp 23 billion in 2008. The company gained Rp 469 billion in revenue last year from Rp 598 billion in 2008.

In the first half of this year, DKB has booked Rp 17 billion in net profits from a total revenue of Rp 260 billion. Riry declined to reveal the company’s net profit target this year.

He said the company had set a conservative target for its ship repairs business this year because its current dock capacity was already running at 20 percent overcapacity.

Ships, mostly Indonesian, have to wait at least one month to be repaired by DKB, which has allocated Rp 500 billion for capital expenditure this year.

The company plans to relocate its shipyard from Jakarta to Batam in order to serve more ships, including from foreign countries.

The new shipyard will be able to serve ships with 80,000 dead weight tons, much larger than DKB’s shipyard in Jakarta which is only able to handle vessels of 30,000 to 50,000 dead weight tones. “The relocation will require an investment of Rp 600 billion. We are now seeking the capital for the plan,” he said.

Riry acknowledged that the company was expecting state port operator PT Pelindo II to pay for the land, which would cost about Rp 350 billion, for the new shipyard. “We will build the shipyard gradually and the payment from Pelindo may help the shipyard to operate,” he said.

Indonesian shipbuilders have complained that high borrowing costs and lack of funds are hampering their ability to expand.

— JP/Nani Afrida