Andhika was established in 1973, it was created by my father and his partner at that time. My father was in the navy and made the decision to start his own shipping company and secured the first contract from Pertamina to carry clean and crude oil within Indonesia. We also established a branch in Hong Kong and 20 years ago we also opened a branch in Singapore. My father also took on another business partner at that time to support the international business branches.

In 1989 my father became the chairman of the Shipping Association and at that time the shipping business was booming for both state owned and private shipping companies in Indonesia. This also saw the rise of Indonesian flag vessels as Indonesian companies started trading abroad for export of items such as timber logs. In 1985 the Indonesian government introduced a scrapping law which saw many companies going out of business and foreign companies coming in. For Andhika, we grew to 30 vessels with 20 of them being tankers. Over the 1990s, my father parted company with one of his partners and in 2005 the decision was made to fully separate from our partners. I joined the company and I am CEO with my family members as commissioners but the company is run mainly by professionals from the shipping industry.

By 2005 most Indonesian companies had completed the necessary processes for cabotage, except for offshore. This is why offshore services have become interesting for foreign investors. We are open for that should a foreign company be willing to work with a local partner as they can own up to 49%. If they want to fly the Indonesian flag then we welcome it as the opportunities are abundant, especially for offshore. Category C for exploration vessels is another area of interest for large scale investment.

Investors have been put off by cabotage but this is a misconception. There are still tenders that accept foreign vessels and then they can change to Indonesian flag vessels once they win the tender so there is still a lot of opportunity.

One of Indonesia’s main problems is that 70% of vessels are old vessels and this is because our national infrastructure is out of date. The government needs to understand that when you build infrastructure, it is not just for commercial gain, rather it is for distribution of staple goods. If a private company builds a port in an area that they need such as Irian Jaya, then that private company can charge what they wish for the use of their facilities. Therefore the government needs to be proactive in building ports to open up the area; if funds are not available then they should work with the private sector. New ports also need to be deep sea ports for the new vessels up to 10,000 TUS.

When the port authorities open a new port with new equipment, they increase the tariff. Corruption also adds to shipping costs significantly but corruption occurs in many countries.

However, other countries introduced the CN coast guard but Indonesia did not introduce this, they use the navy, police, customs etc. so they have the right to come and inspect the ships and this also adds to the time it takes to clear the goods as we do not have the CN coast guard regulations. I am pushing the government for this but I do not know when it will happen.

To improve the sector, the three areas of focus need to be technology to make processes more efficient and up to international standards, human resources such as the lack of good officers and seafarers of SCTW standard and finally infrastructure. The Indonesian government must concentrate on bringing Indonesia in line with the ASEAN Connectivity Masterplan 2015 so that we can compete with other ASEAN countries and contribute to this plan of 45 connected ports.

We are interested in working with companies with expertise, particularly in the area of offshore services. There is also the need for new vessels as the technology is constantly being renewed every two or three years. For capital as well, offshore requires a lot of capital due to the size of the vessels.

Foreign companies should note that Indonesian business people are grabbing the opportunities, even if they do not have experience in shipping. At KADIN, we have had 59 new members in less than a year which means they really recognise the opportunity.

We currently work with JEC which is a ship agency and Canadian Shipping line for coal. In the future we are looking at going into offshore oil and gas logistics and we would like to work with other foreign companies as this requires large scale investment.

For China, there have not been any windows of opportunity. We have worked with Chinese oil companies but not with a Chinese shipping company. Investment from China has focused on energy, mining and refineries for example but not for shipping. I think Chinese investors have not seen the potential of the shipping sector in Indonesia yet.

At Andhika, our vision is to be a trusted and preferred partner in sea transportation and other related logistical services. That means we must continuously develop the capacity of our human resources and the organisation itself. All of our practices must be conducted with integrity, prudence and professionalism to be a fully sustainable business.

Andhika is open to foreign companies that want to come in and we still need their investment to grow Indonesia. International investors think Indonesia is being protectionist against foreigners through cabotage but this is not true. As the head of the association I can tell you that we still need their investment and expertise and key areas for investment include shipyards where foreign investors can own up to 85% and in joint ventures for shipping where they can own up to 49%.