SINGAPORE SHIPBUILDERS RELOCATING TO BATAM

Business and Investment - November 17, 2006

Fadli, The Jakarta Post, Batam

With Singapore restricting the growth of its shipbuilding industry due in part to environmental reasons, Batam and Karimun islands are taking advantage by attracting increasing numbers of shipbuilders from the neighboring country.

"Batam and Karimun have become the main destinations for Singaporean shipbuilders wishing to relocate. We welcome this trend because the industry has the potential to provide significant employment," said Chandra Dahlan, the chairman of the Batam Shipyard Offshore Association (BSOA).

BSOA figures show that there are currently 33 shipbuilders operating in Batam alone, with over 80 supplier companies. Chandra said that at least five of the shipbuilders had relocated from Singapore.

He added that with the strategic position occupied by the two islands, the trend would likely continue over the next few years.

Johannes Kennedy Aritonang, the chairman of the Batam branch of the Indonesian Chamber of Commerce (Kadin), also applauded the trend, saying it would help spur economic growth.

However, he pointed out that the relocation trend only involved small shipbuilders, which he claimed was the result of Singapore's inconsistency in implementing its environmental policies.

"At the moment, we can see the relocation only concerns small-scale companies, because despite its environment policies, Singapore is still holding on to the large-scale ones. They (the small shipbuilders) do contribute to the local economy, but to a limited extent," Johannes said.

If the trend continued, the environment in the two islands would suffer, he added.

"What Batam and Karimun want are the big shipbuilders, which comply with proper and globally standardized working mechanisms. But not the small companies, which often neglect environmental concerns."