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Indonesian logistic firms gear up for 2015 single market

Jakarta Post (Indonesia) 2 December, 2013 Nurfika Osman Related Companies: FedEx C orporation Asia Indonesia Singapore Related Topics: C ompany Leadership Business Strategies Market Share IT New Technology Management Team [profile] Related Geographies:

Jakarta (The Jakarta Post/ANN) - Domestic logistics and forwarding companies are expanding their networks to anticipate growing competition from regional rivals following the implementation of the Asean Economic C ommunity (AEC ) in 2015. RPX Group vice president of sales and marketing Andry Adiwinarso said his company was building networks across the archipelago, as well as forging business partnerships with international logistics players to strengthen its market foothold and improve service quality. "Partnering with global or local players will give us a competitive edge as through collaboration we can enhance our services, helping us gain more market share," Andry said. He said the group was assessing some companies that would be partnering with them in the near future as well as preparing a new business plan for the next five years. "We see collaboration and carefully-planned long term business programs as important elements nowadays, as we need to compete in an open market in addition to facing infrastructure bottlenecks in the country," he went on. The group has teamed up with US-based FedEx Express (FedEx), a subsidiary of FedEx C orp, the world's largest express transportation company since it was established in 1985, and it currently operates more than 400 vehicles, including two Boeing 737-200F freighter planes that are stationed in eastern Indonesia . He said the group had allocated US$50 million in investment to support its 2011-2015 business expansion plan, which included an increase in the number of outlets from 300 to 1,000 by the end of 2015. PT Tiki Jalur Nugraha Ekakurir (JNE) managing director Johari Zein said the firm also planned to set up new networks in the eastern part of Indonesia as well as strengthen its information technology (IT) system and communication between its branches. Johari said the firm would open at least 20 operating service points in East Nusa Tenggara (NTT), Maluku and Papua next year and spend 500 billion rupiah ($41.8 million) to upgrade its IT system over the next five years. "This is to anticipate surging demand from customers in the future because we have to keep delivering good services to them," he said, adding JNE had around 400 operating points nationwide and operated 288 vehicles to distribute the goods. He also said the firm had been developing its human resources with a lot of training in logistics and technology so it would be able to keep adapting to new technologies and new customers, in addition to improving services. Like other local players, C KB Logistics, a subsidiary of publicly listed energy company ABM Investama, is also expanding networks in the country to ensure its ability to compete in the Asean single market. The AEC Blueprint was signed by Asean leaders on Nov 20, 2007. Under the AEC , which is scheduled for implementation in 2015, member states will see a better free flow of goods and services as tariffs among members will be reduced to a maximum of 5 percent. C KB general manager Denny Fikri said the firm planned to open branches in Singapore, Kuala Lumpur and Bangkok next year to accommodate demand from customized logistics in the energy and construction related sectors. "We have a lot of international customers who also operate in Asean countries, so we need to expand, not only to anticipate demand from them but also to strengthen our networks in the region," he said. He also said the company would commence operations of its new warehouses in Medan (North Sumatra), Palembang (South Sumatra) and Makassar (South Sulawesi) in 2014 and expand its existing facilities in Surabaya (East Java), Banjarmasin (South Kalimantan) and Balikpapan (East Kalimantan).

2 0 1 3 A c quire M edia C orporation. P ublis hed by O neSourc e I nformation Servic es , I nc ., D ec ember 2 0 1 3

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