New Market Study Published: Indonesia Freight Transport Report Q3 2010

Recently published research from Business Monitor International, "Indonesia Freight Transport Report Q3 2010", is now available at Fast Market Research
 
July 19, 2010 - PRLog -- In the second quarter of 2010, the railway consortium of Indonesia's state-owned mining company PT Tambang Batubara Bukit Asam was talking with two China-based private equity funds about potential funding for a US$1.3bn railway project in Sumatra, Indonesia. The two Chinese funds are - Hopu Investment Management and a private equity unit of China Development Bank. Bukit Asam said that China Export-Import Bank would be the main financier for the project. Indonesia is currently the world's leading exporter of thermal coal. Rail is seen as one of the most efficient ways to transport coal. Consequently, the country is working to build up its rail network to transport the coal and therefore maximise production in the region.

Indonesian GDP, which slowed to 4.5% growth in 2009, is according to BMI's forecast set to expand by 5.2% this year, gathering pace to 5.8% in 2011. Over the next five years, we believe that annual GDP growth will average a strong 5.8%. Although Indonesia will benefit from improving world trade and a particularly healthy Asian regional economy, the bedrock of this growth will be the domestic market, giving the country an extra degree of resilience. There are some political clouds on the horizon, but on the whole, however, the macro outlook for the freight transport sector is encouraging.

Garuda Indonesia, the national airline, is in the middle of a turnaround. In June, it returned to Europe after a six-year absence, opening a Jakarta-Amsterdam route. The Indonesian airline sector is benefiting from an improving safety record, which, together with the good economic prospects both for Indonesia itself and for the wider Asian regional economies, is making BMI more optimistic about the airfreight scenario. After a 1.8% fall in cargo tonnes in 2009, we see volume growth of 6.0% this year, and an annual average rate of expansion of 6.5% through to 2014, just a little ahead of the GDP.

Coal mine development plans are booting future demand for bulk rail freight. A future Indonesian rail freight boom appears possible. However, that time is not quite yet. At present, there is a small and poorly managed, mainly state-owned rail network, and BMI sees it suffering from underinvestment. Accordingly, we see freight volume falling marginally this year and next, as passenger demand limits freight availability. Between now and 2014, rail cargo volume growth will reach a disappointing annual average of 2.6%.

In 2010, BMI projects that total tonnage handled at Tanjung Priok port on West Java will increase by 5.8% to reach 37.387mn tonnes, after the sharp recession of 2009, when volume slumped by 15.9%. For the next few years, held back by capacity constraints, we see tonnage at Indonesia's main port growing by 5-6% per annum, more or less in line with the expected rate of GDP expansion. At the smaller Port of Palembang in Sumatra, where tonnage slumped by almost half in 2009, we see a modest 4.5% gain this year to 6.11mn tones.

In 2009, Indonesia's trade volumes slumped by 12.1% in real terms, reflecting the impact of the global recession. This year we see the country experiencing a fairly vigorous trade recovery, with the total rising by 9.1%. In the next five years, we see trade growing in real terms by an average of 9.3% every year, well ahead of GDP. This, in part, reflects where Indonesia is located: part of emerging Asia which will be one of the world's most vigorous economic sub-regions over the next few years. In nominal terms, we see exports rising by 29.3% this year to US$169bn, with imports surging by almost one-third - 30.9% - to US$151.3bn.

Our central forecast for Indonesian freight is relatively bullish, so it is perhaps unsurprising that we believe the risks are on the downside. Two main risks stand out. First, although he has enjoyed a relatively good run so far, President Susilo Bambang Yudhoyono may find himself weakened by a series of corruption scandals, and this could distract and divide his ministerial team, slowing down the pace of economic reforms. Second, a sharper than feared 'double dip' recession in China and the US in 2011 could also have a negative effect on growth and freight demand, even though we believe that Indonesia is relatively protected because of the size and resilience of its domestic market.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/72749_indonesia_freight_transp...

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

# # #

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
End
Source: » Follow
Email:***@fastmr.com Email Verified
Zip:01267
Tags:Freight, Rail, Transport, Coal, Indonesian, Maritime, Tonnage, Oil, Slumped, Port
Industry:Transportation, Automotive, Shipping
Location:Massachusetts - United States
Account Email Address Verified     Account Phone Number Verified     Disclaimer     Report Abuse
Fast Market Research PRs
Trending News
Most Viewed
Top Daily News



Like PRLog?
9K2K1K
Click to Share