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On 1 October, four Indonesian state-owned port operators, Pelindo I, II, III and IV, will merge to form the world’s eighth-largest container terminal operator.
Pelindo I operates 19 ports in the provinces of Aceh, North Sumatra, Riau, and Riau Islands.
Pelindo II, also known as Indonesia Port Corporation (IPC), operates a dozen in 10 provinces, including Tanjung Priok, the main container gateway to Jakarta.
Pelindo III operates 43 in seven provinces, including Tanjung Perak in Surabaya and Semarang in central Java, which connects to China, South Korea and Singapore.
And Pelindo IV operates ports in eastern Indonesia.
IPC will acquire the operations and assets of Pelindo I, III and IV, after which they will become dormant, but won’t be liquidated.
Deputy minister for state-owned enterprises Kartika Wirjoatmodjo said amalgamating the four port operators would create a port operator with an annual throughput of 16.7m teu, and would standardise operations and minimise expenditure.
She said: “This merger will open up the opportunity for IPC to compete globally. As the world’s eighth-largest container terminal operator, it will be advantageous to the economy ,as port management companies seek globalisation opportunities. Ultimately, we can also reduce domestic logistics costs by further developing our port network.”
Domestic shipping costs are high in Indonesia, which is formed by a cluster of islands.