PT Arpeni Pratama Ocean Line, Indonesia's largest coal transporter, plans to spend as much as US$350 million to buy ships, as construction of power plants boosts demand for the fuel in South-east Asia's largest economy.
Arpeni plans to buy eight of the so-called Panamax class vessels by 2009 to double the number it currently owns, Oentoro Surya, president director of the Jakarta-based company, said in an interview.
Arpeni may fund the purchase with bank loans and proceeds of last year's US$160 million share sale, Mr Surya said last Thursday.
Arpeni and other Indonesian carriers such as PT Berlian Laju Tanker are betting on President Susilo Bambang Yudhoyono's building of more coal-fired power plants to boost business. Arpeni already derives about 40 per cent of its revenue from transporting coal.
'Demand for coal doesn't stop, especially once the power plants start to run,' Bonny Setiawan, an analyst at PT CIMB-GK Securities Indonesia, said in Jakarta yesterday.
Indonesia will need 22 of Panamax-type vessels to ship coal to the new power plants, Mr Surya said. A Panamax vessel is the largest ship that can sail through the Panama Canal with a full cargo. 'It will take time to add ships so we need to start ordering them now,' Mr Surya said.
Shipping companies such as Arpeni and PT Berlian Laju Tanker are expanding their fleet on rising demand to transport natural resources in the domestic and overseas market. The Baltic Panamax Index, which measures the cost for transporting dry-bulk on Panamax vessels, has risen 36.8 per cent this year to 5,826 as of April 30.
Berlian Laju, Indonesia's biggest shipping firm by market value, may spend US$500 million this year to add ships, it said on April 18. Berlian Laju, which derives 75 per cent of revenue from its overseas operation, is tapping into a global shortage of vessels to transport chemical products in the Middle East.
Mr Surya didn't rule out another bond sale to fund purchases, saying interest rates are attractive.
Bank Indonesia's benchmark interest rate is at a 19-month low of 9 per cent, following 10 rate cuts since May to spur consumer spending and boost investment. Arpeni, Berlian Laju and PT Samudera Indonesia are among the shipping companies that together handled 55 per cent of the nation's overseas trade, Mr Surya said. Still, they lose about US$17 billion in revenue a year to their foreign rivals, he said.
To encourage the local shipping companies, which control 60 per cent of domestic coal shipment, the government plans to enforce the cabotage principle, Mr Surya said.
Arpeni plans to buy eight of the so-called Panamax class vessels by 2009 to double the number it currently owns, Oentoro Surya, president director of the Jakarta-based company, said in an interview.
Arpeni may fund the purchase with bank loans and proceeds of last year's US$160 million share sale, Mr Surya said last Thursday.
Arpeni and other Indonesian carriers such as PT Berlian Laju Tanker are betting on President Susilo Bambang Yudhoyono's building of more coal-fired power plants to boost business. Arpeni already derives about 40 per cent of its revenue from transporting coal.
'Demand for coal doesn't stop, especially once the power plants start to run,' Bonny Setiawan, an analyst at PT CIMB-GK Securities Indonesia, said in Jakarta yesterday.
Indonesia will need 22 of Panamax-type vessels to ship coal to the new power plants, Mr Surya said. A Panamax vessel is the largest ship that can sail through the Panama Canal with a full cargo. 'It will take time to add ships so we need to start ordering them now,' Mr Surya said.
Shipping companies such as Arpeni and PT Berlian Laju Tanker are expanding their fleet on rising demand to transport natural resources in the domestic and overseas market. The Baltic Panamax Index, which measures the cost for transporting dry-bulk on Panamax vessels, has risen 36.8 per cent this year to 5,826 as of April 30.
Berlian Laju, Indonesia's biggest shipping firm by market value, may spend US$500 million this year to add ships, it said on April 18. Berlian Laju, which derives 75 per cent of revenue from its overseas operation, is tapping into a global shortage of vessels to transport chemical products in the Middle East.
Mr Surya didn't rule out another bond sale to fund purchases, saying interest rates are attractive.
Bank Indonesia's benchmark interest rate is at a 19-month low of 9 per cent, following 10 rate cuts since May to spur consumer spending and boost investment. Arpeni, Berlian Laju and PT Samudera Indonesia are among the shipping companies that together handled 55 per cent of the nation's overseas trade, Mr Surya said. Still, they lose about US$17 billion in revenue a year to their foreign rivals, he said.
To encourage the local shipping companies, which control 60 per cent of domestic coal shipment, the government plans to enforce the cabotage principle, Mr Surya said.