Suspending Vessel Purchase, Soechi Lines Moves to Shipyard Industry

Suspending Vessel Purchase, Soechi Lines Moves to Shipyard Industry

JAKARTA – The government’s plan to improve maritime business gets warm welcome from PT Soechi Lines Tbk. This shipping firm intends to work on shipyard business in the second half of 2015.

Besides due to the government’s incentive plan for this sector, Soechi Lines also eyes for business opportunity from vessel maintenance and reparation service needs hike. It is caused by the regulation requiring the use of Indonesia-flagged vessels in Indonesia.

Paula Marlina, Soechi Lines Finance Director and Corporate Secretary, said for this shipyard business, Soechi Lines eyes services for big vessels. “Many small shipyards below 20,000 dead weight ton (DWT) have been built. We will serve big vessels,” Paula told Kontan on Sunday (1/25).

So far, Paula said, big vessel owners often repair their vessels in China and Singapore. They will be a market eyed by Soechi Lines. To work on shipyard business, the firm with SOCI as the code in Indonesia Stock Exchange (IDX) has had a shipyard located in Karimun Island, Riau Islands.

At the location, SOCI has 200-hectare land including agricultural land whose depth can accommodate big vessels. For the investment of vessel maintenance and reparation service business, SOCI allocates 2015 capital expenditure (capex) of IDR 291.21 billion. The capex source is from initial public offering (IPO) held last year and drawing IDR 582.42 billion.

For the first phase, SOCI only utilizes 30% of land in Karimun with the target to serve 50,000 DWT vessel maintenance and reparation. If the shipyard is operated and has stable cash flow, its capacity will be enhanced to serve big vessels with 300,000-DWT size.

This commercial service from SOCI shipyard is targeted to begin in second half of 2015. The firm’s management hopes this business can contribute for 30% SOCI consolidation revenue this year. Besides working on vessel reparation business, SOCI also has another agenda which is to add seven additional vessels.

However, second-hand vessel price hike urges the firm’s management to focus on spending the budget from IPO to develop shipyard business. According to Paula, second-hand vessel price increases for 10-20% than last year.

The vessel price hike urges the management to wait and see. This attitude is also related to IPO budget realization which is under the initial target.

Previously, SOCI intended to release 30% of its shares to public with IDR 1.54-2.05 trillion budget target. However, upon the execution, SOCI only released 15% of its shares and drew IDR 582.5 billion. Paula said SOCI still has a space to seek loan to buy vessels. “We have client from banking sector,” Paula said. (Kontan)