Damas Jati - , 31/08/2017, 11:59

Indonesia’s private logistics companies fear with the monopoly of state owned companies (BUMN) within the sector, following the massive business expansion of some BUMN companies that take the business all, from upstream to downstream, Chairman of Indonesia Logistics and Forwarding Association Yukki N. Hanafi warned the business stakeholders.

Yukki noted the situation would threaten the existence of private logistics business companies in the future. He further said that they would be more afraid of the BUMN monopoly rather than the threat from foreign companies’ domination, though foreign had been permitted to owned until 100% share in logistics company.

"In the logistics business, foreign companies can have it until 100%. But we do not worry, as they will open an opportunity to build partnership with local companies. In addition, the foreign company will not take the business all from upstream to downstream. But the BUMN companies do it,” Yukki explained recently.

He gave some examples on how some BUMN companies did monopoly practice in the logistics business, including how shipping line PT Bahtera Adiguna monopolized the shipment of coal supply to power plant of state electricity company PLN, after PLN did acquisition to PT Bahtera Adiguna and made it as its subsidiary company.

“The trend or its modus is a BUMN company will set up a subsidiary company or acquires another BUMN company and then make it as its subsidiary,” he said. The next step, according to Yukki, is that the works from the parent company will be given to its subsidiary. “That is what is going on within the PLN. This company will directly appoint PT Bahtera Adiguna to handle coal shipment to PLN power plant without bidding.”

As a result, some private shipping lines lost opportunity from it, threatening with bankruptcy their as they lost income to pay for their investment in new vessel procurement.

Just like PLN Yukki also named state port operator like PT Pelindo II/IPC that also did similar strategy. Now IPC has some subsidiaries in logistics business, including Multi Terminal Indonesia (MTI). Yukki also reminds state port operators strategy to partner with foreign companies in terminal operation rather than partner with local companies.