BP Batam Building to Become Prime Investment Destination in Asia Pacific

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Sea of potential: An aerial view of Batu Ampar seaport, Batam, Riau Islands. Intensive efforts are underway to improve and upgrade the seaport to give it a competitive edge over its regional competitors. (Courtesy of BPK FTZ Batam)

Batam Free Trade Zone Authority (BPK-FTZ) is concertedly developing Batam as a main investment destination in Asia Pacific. The serious attitude and efforts in achieving this goal are clear from the preparation of the necessary infrastructure at its seaport and airport, as well as other related facilities to make Batam highly competitive in the region.

Sea of potential: An aerial view of Batu Ampar seaport, Batam, Riau Islands. Intensive efforts are underway to improve and upgrade the seaport to give it a competitive edge over its regional competitors. (Courtesy of BPK FTZ Batam)

The revamping of Batu Ampar seaport is vital in supporting the operations of factories in Batam. The central government’s full support for BP Batam is shown by its decision to bear the full cost of the development amid uncertainty concerning the realization of a partnership with French shipping company Compagnie Maritime d’Afretement-Compagnie Generale Maritime (CMA-CGM).

The seaport project, costing Rp360 billion (US$37.36 million), started this year and will be completed by 2014. It will enable direct shipments to destinations and remove dependence on Singapore as a transit point.

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The planning and development director of Batam Free Trade Zone, Istono, said the project started at the end of August with the installation of a piling mast for reclamation at the North Pier.

Funds for the project will come from the national budget until 2014: Rp63 billion is allocated in 2012, Rp200 billion in 2013 and, finally, Rp97 billion in 2014.

After completion, capacity will be increased from 200,000 twenty-foot equivalent units (TEU) to 600,000 TEU, with the expansion of the North Pier from its current length of 400 meters in length to 1,100 meters. The current depth of 14 meters will also be increased to 17 meters for ships with large tonnage.

“This project will be completed in not more than two years and will be the main seaport in Batam for industry, especially containers,” said Istono.

Istono said state-owned company PT Wijaya Karya has been appointed as the main contractor for the expansion. The company will be responsible for building a 700-meter-long pier, dredging activities, installing cranes and railings, repairing the existing pier, installing a high-mast lighting system, wiring, hydrants and supplying clean water.

CMA-CGM was slated to manage Batu Ampar seaport, but the fate of the 2005 Memorandum of Understanding (MoU) remains unclear.

The upgrade of the seaport will increase capacity to 1.2 million TEU per year, which will smoothen the traffic of consignments to and from the port. Although the project’s current design is different from that planned by the French company, the enhancements are still significant.

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Meanwhile, Tanjung Sauh port, to be built by PT Pelindo II, will be a transhipment port, with destinations in Europe, Japan and other part of Asia.

The enhancement of seaport services by BP Batam is welcomed by the business world here and the Riau chapter of the Indonesian Chamber of Commerce and Industry (Kadin). Kadin regards the seaport as a vital facility for Batam’s industry. The current limited capacity of Batu Ampar has slowed down the movement of raw materials.

“We welcome the development project of Batu Ampar seaport,” said deputy chairman of Kadin Riau, Amat Tantoso.

Apart from its seaports, BPK-FTZ Batam is also expanding capacity and facilities at Hang Nadim Batam International Airport. Its 4,025-meter runway is the longest in Indonesia and can be used by super jumbo jets, including the Airbus 380.

The passenger capacity of the airport has been significantly increased. The airport’s high-quality facilities will be supplemented by the development of a shopping center, befitting its status as an international airport.

China Investor to build bauxite refinery in Batam

The Hainan Joint Enterprise Business Service Co. Ltd. and its Indonesian partner company, PT Indopura Resources, plan to construct a bauxite refinery worth US$700 million in Batam, Riau Islands. The factory is expected to employ 5,000 workers.

PT Indopura Resources director Cedric Lam, its managing director Arief Winata and Hainan Joint Enterprise managing director Xi Cheng Xian said in a press conference on Wednesday that the factory was scheduled to begin operating in 2014.

According to Arief, the construction of the factory will take one year to complete. “The land is available for the construction of the refinery,” he said.

“We chose Batam because the city has a sufficient electricity supply and clean water,” he added.

The refinery is expected to distill 2.7 metric tons of bauxite into alumina every year. Arief said the export value of alumina could be five times higher than the raw bauxite.

“We are aiming to export it to China. But, there are alternative opportunities for the alumina to be exported to other countries,” Arief said. (Fadli/The Jakarta Post)

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