Ichsan Amin, Jakarta – The Indonesian shipyard industry is nudging the government to introduce incentives and low-interest financing in an attempt to woo businesses into buying domestically made vessels.

Indonesian shipbuilding association Iperindo chair Anita Puji Utami said Monday that shipyards in general required "massive investments" for their operations. She encouraged businesses to order homegrown vessels, citing the national shipyards' potential and the possible greater economic boons.

"That's why the government should provide stimulus to shipping companies that build vessels in Indonesia. They can offer low-interest bank financing for new construction," Anita said, while also proposing cashbacks.

Beyond fiscal incentives, lenders could provide favorable interest rates and long repayment tenors for new vessel purchases, the Indonesian Shipowners Association INSA suggested.

"This industry is vital, as it demonstrates sovereignty over our waters. Being capital-intensive, it naturally warrants government attention, just like other industries in the country," INSA chair Carmelita Hartoto said.

Earlier this year, Finance Minister Purbaya Yudhi Sadewa attributed the weakening shipyard industry to the massive imports of used foreign-made ships. He admitted that the government had not spent enough money to support the industry, including in terms of upgrading the ageing ships using the state budget.

"We are buying foreign ships despite being a maritime country," Purbaya told a business forum, as seen in a press release published back in February.

The release did not mention plans for incentives, but showed Purbaya calling business lobby Kadin and the government to come up with a roadmap to revive the shipyard industry. This includes ensuring greater priority for domestic production.

Source: https://jakartaglobe.id/business/indonesian-shipyards-hope-for-incentive