President Jokowi Inaugurates First Bonded Logistics Center in Indonesia
Date 10 Maret 2016
President Joko Jokowi Widodo on Thursday (10/3) in Cakung, North Jakarta, inaugurated a bonded logistics center (locally known as Pusat Logistik Berikat/PLB) owned by PT Cipta Krida Bahari in Cakung, North Jakarta.
President Jokowi also expects massive movement of raw or intermediate goods that previously had to be stored or stockpiled in warehouses in other countries to those logistic centers.
According to the President, with facilities provided at those logistic centers, business players can store their goods there.
So it is expected that logistic costs will be lower because we do not have to transport goods from other countries that needs costs, the President said.
For the record, those logistics centers serve to store or stockpile raw or intermediate goods to secure supplies for various industrial sectors without adding unnecessary logistical costs. Importing directly through those bonded houses would be rewarded by special tax treatment.
President Jokowi believes those logistics centers will reduce both transportation and logistics costs.
The President also cited the example of cotton production. So far, he added, Indonesia has been able to produce cotton but in fact, the logistics center for cotton production is located outside Indonesia.
Why should we take raw materials for production in another country? I hope we will stop this. We have to move logistics centers to our country, he said.
With facilities and incentives provided, it is expected that goods that were previously stored in other countries such as Singapore and Malaysia can now be stored at home, the President said.
President Jokowi also emphasized that just like other countries, Indonesia must also be able to provide its own logistics centers and reminded that it is now already an era of competition.
Our logistics cost and our transportation costs are still very high. Transportation costs in Indonesia can reach 24-27 percent of the total production costs. It is still very high, he added.
President Jokowi also hopes that logistics and transportation costs in Indonesia could be the same or even lower that the costs in other countries that are already efficient such as Singapore and Malaysia. Because the consumption as well as the production are here. The Gross Domestic Product in Indonesia is 45%
Furthermore, the President Jokowi also believes that the operation of those logistics centers would reduce inflation because the prices of goods are lower.
So the key is transportation costs. Once the logistics costs are lower, we can reduce transportation costs? How, through (improvement of) infrastructure. We have to improve seaports, toll roads, railways, and so on. Thats what we aim, he said.
In the meantime, funds to build those logistics centers are from investment from the private sector.
The logistics center owned by PT Cipta Krida Bahari, which is located in Cakung, North Jakarta, is one of eleven logistics centers and is especially provided for oil and gas and mining industries.
Now we have 11 logistics centers. Later on, it all depends on investors. If they want, they can build as many as bonded houses in all regions, in all provinces, he added.
President Jokowi also urged his officials to always check on the grounds to ensure that projects that have been auctioned can really be implemented.
As for the issue of dwelling time, President Jokowi admitted that he is still unsatisfied with the dwelling time.
He targeted that in April, dwelling time can reach 3 days from the current 4.7 days.
Most importantly, the system has to work. We also have to increase the speed of loading and unloading goods. If we dont implement the system on the ground, that means were only talking on the table. Now we have to realize it on the ground, the President said. (FID/ES)(EP/YM/Naster)