A comprehensive guide to Batam’s maritime industry

Exploring Batam’s Maritime Industry Landscape

  • InCorp Editorial Team
  • 26 June 2024
  • 5 minute reading time

From key players and infrastructure developments to regulatory frameworks and emerging trends, we aim to equip you with the knowledge to navigate and thrive in Batam’s maritime industry landscape.

As a pivotal hub in the region, Batam’s maritime industry is crucial in local and global trade networks. This article will guide you to a comprehensive understanding of the multifaceted aspects that define this dynamic sector. 

The Overview of Batam’s Maritime Industry

The maritime industry is significantly contributing to economic growth in Batam in the first quarter of 2023, reaching 20 to 30%. Jadi Rajagukguk, Chairman of Kadin Batam, highlights the industry’s substantial contribution due to its capital and labor-intensive nature.

The growing performance of shipyard businesses primarily supports the maritime industry. Currently, there are more than 200 shipyards in Batam.

Batam’s Maritime Industry Among Global Players

For the past two decades, maritime industries have played a significant role in Batam’s industrial growth. While they faced challenges like fluctuating oil prices and the COVID-19 pandemic, they managed to survive and progress.

Many shipyard industries are concentrated in Tanjung Uncang, located on the western side of Batam Island within the Sekupang development area. Batam’s shipyard industry has gained trust from countries like Japan, South Korea, Malaysia, Singapore, the UK, and the Netherlands.

As interest in the maritime industry continues to grow and more businesses consider relocating here, Batam is well-positioned to support and serve the maritime industry in Singapore and other places, providing a more appealing and competitive business environment.

Read more: How Indonesia Plans to Lead Global Maritime Economics

Government Policies and Incentives

A comprehensive guide to Batam’s maritime industry

Batam City’s allure as an investment hub knows no bounds. Its strategic proximity to the Malacca and Singapore Straits is one of its many advantages. Additionally, the unwavering support from the government for investments in Batam is evident. The strengths that bolster Batam’s investment climate include:

  • Advanced, technology-driven infrastructure services
  • Batam boasts one of Indonesia’s lengthiest runways at its airport
  • Ongoing enhancements to passenger and cargo ports, with international routes
  • Progress on a bridge project linking Batam, Galang, and Rempang
  • Well-defined boundary between green and industrial zones
  • BP Batam ensures both comfort and safety
  • Government-backed incentives for investing in Batam include:
    • Import duty, PPn, and PPnBM exemptions (for machinery, raw materials, and spare parts, expediting import production)
    • A 0 percent import duty for shipbuilding industry components
    • Collaborative agreements with 56 countries to prevent double taxation.

Challenges and Opportunities in Batam’s Maritime Industry

Navigating the dynamic waters of Batam’s maritime industry presents a landscape rich in challenges and opportunities. The sector is vital, requiring strategic vision and decisive action. 

The Challenges

Despite the maritime industry’s progress and achievements in Indonesia, it still confronts several obstacles.

1. Infrastructure

An essential obstacle lies in improving efficiency and updating infrastructure elements such as ports, ships, and logistical facilities to bolster the industry’s expansion and competitive edge.

2. Security

Addressing maritime security issues like piracy and illegal fishing is another hurdle, as these issues can disrupt industry operations and harm its reputation.

3. Environment

Balancing economic growth with environmental responsibility is a significant challenge. The industry’s activities, such as production and transportation, can impact the environment, and there’s a growing emphasis on eco-friendly and sustainable practices among stakeholders.

The Opportunities

Exploring the realm of opportunities in Batam’s maritime industry unveils a landscape rich with potential. 

1. Strategic Location

Batam is strategically positioned along major shipping routes and shares borders with Singapore and Malaysia.

2. Complete Facilities

The city administration manages crucial facilities like the Free Trade Zone and Special Economic Zone (KEK), along with Hang Nadim International Airport and Batu Ampar Port, all under the oversight of Badan Pengusahaan Batam (BP Batam). These valuable assets serve as vital air and sea transportation gateways, supporting local businesses and trade.

3. Batu Ampar Port

BP Batam has improved Batu Ampar Port by acquiring a ship-to-shore (STS) crane from South Korea. 

This STS crane is expected to streamline the container loading and unloading process at Batu Ampar Public Terminal, making it faster and more efficient.

Indonesia Will Be A Maritime Country by 2045

Minister of National Development Planning/Head of Bappenas, Suharso Monoarfa, emphasized that by 2045, coinciding with the 100th anniversary of Indonesia’s independence, the country will strengthen its position as a maritime nation.

The government will prioritize maritime thinking within the National Long-Term Development Plan (RPJPN) for 2025-2045. This approach needs to be streamlined to define how maritime will become the vision for Indonesia in 2045.

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How to Maximize the Opportunity

The maritime industry in Batam has demonstrated positive trends for several years. With its supporting instruments, such as regulation and adequate infrastructure, Batam will emerge as a strategic region for the maritime industry, mainly as Indonesia aims to be a maritime country by 2045.

InCorp Indonesia supports investors who aim to establish a business in Batam by providing company registration and business license services. 

Contact our consultant by clicking the button below to explore business opportunities in Indonesia’s emerging-world class maritime industry.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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Frequent Asked Questions

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As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

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