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tate-owned operator PT Pelabuhan Indonesia (Pelindo) I has joined forces with publicly listed state construction firms PT Pembangunan Perumahan (PTPP) and PT Waskita Karya on the expansion of Kuala Tanjung Port in North Sumatra.

Named PT Prima Multi Terminal, the joint venture is aimed at speeding up the expansion project in anticipation of surging traffic in the near future.

The new company was established on Friday with starting capital of Rp 580 billion (US$47.4 million) and paid-in capital of Rp 174 billion.

Pelindo I controls a 55 percent stake in the joint venture, worth Rp 97.5 billion, while PTPP and Waskita obtain 30 percent (Rp 52.2 billion) and 15 percent (Rp 26.1 billion), respectively.

'€œPrima Multi will build a new terminal in Kuala Tanjung Port, North Sumatra, and will be the operator once the terminal is completed,'€ Pelindo I president director Bambang Eka Cahyana said on Tuesday.

For the initial phase of the new terminal construction, Pelindo I '€” through Prima Multi '€” would spend Rp 1 trillion. Around 70 percent of the funds would come from loans and the remaining 30 percent would be equities from each of the shareholders based on their share-ownership in Prima Multi, he said.

Pelindo I expected that the construction of the new terminal
would commence early next year so that the terminal could start operating in the first half of 2016, Bambang said.

'€œThe terminal will mainly serve a number of companies to transport crude palm oil [CPO],'€ he said, adding the construction of the terminal was in line with the government'€™s plan to boost the capacity of Kuala Tanjung Port.

The government has targeted to improve Kuala Tanjung Port'€™s capacity to around 25 million 20-foot equivalent units (TEUs) by the end of 2030.

The port has a capacity of 900,000 20-foot TEUs, helping the overcrowded nearby Belawan Port transport the CPO of state plantation firms PT Perkebunan Nusantara (PTPN) III and PTPN IV, Bambang said.

A number of companies, including PTPN III and Anglo-Dutch multinational firm Unilever, will need more facilities at the terminal to transport their new products in the future.

PTPN III and Unilever are currently developing oleochemical plants in the Sei Mangke special economic zone (KEK), near the ports of Kuala Tanjung and Belawan.

In addition, Bambang said once the new terminal was completed and the joint venture Prima Multi had started operating, his company'€™s revenues would surge.

The firm targeted to increase its net profit to Rp 550 billion this year from Rp 489 billion last year.

Both PTPP and Waskita also expect to see an additional income from the construction of the new terminal and joint venture.

'€œOur participation in the joint venture is part of our strategy to expand our business,'€ PTPP said in a statement.

Waskita corporate secretary Haris Gunawan said his firm would likely receive a 15 percent profit margin by constructing the new
terminal.

'€” JP/Khoirul Amin