Keppel T&T logistics arm expands into Indonesia

New joint venture will focus on FMCG sector.

In a release, Keppel Telecommunications & Transportation Ltd's (Keppel T&T) wholly-owned subsidiary, Keppel Logistics Pte Ltd (Keppel Logistics) announced that it has signed a joint venture agreement with PT Puninar Jaya (Puninar Logistics) to provide integrated logistics services for the consumer and retail goods sector in Indonesia.

The joint venture company (JV Co), PT Keppel Puninar Logistics, will be 49% owned by Keppel Logistics and 51% owned by Puninar Logistics.

Synergising Keppel Logistics' strengths in serving the fast moving consumer goods (FMCG) industry, modern logistics management expertise and IT infrastructure with Puninar Logistics' wide domestic distribution network and storage capabilities, the JV Co will provide customised and cost-effective integrated logistics services, with a focus on the growing FMCG, retail and healthcare sectors in Indonesia.

Puninar Logistics' comprehensive range of integrated logistics services are supported by 150,000 sm of indoor warehouse facilities, 150,000 sm of open yard storage space and a fleet of 800 vehicles.

The joint venture agreement signing ceremony was graced by His Excellency Mr Anil Kumar Nayar, Singapore's Ambassador to Indonesia; Dr Muhamad Chatib Basri, Chairman of Indonesia's Investment Coordinating Board (BKPM); Mr Teo Soon Hoe, Senior Executive Director of Keppel Corporation and Chairman of Keppel T&T; Mr TP Rachmat, President Director of PT Triputra Investindo Arya and Mr Eddy Korompis, President Commissary of Puninar Logistics. The agreement was signed between Mr Tjahjadi Lukiman, CEO of Puninar Logistics and Mr Pang Hee Hon, CEO of Keppel T&T.

Mr Pang said, "We are delighted that our first inroad into Indonesia is with Puninar Logistics, one of the largest and most reputable logistics players in Indonesia. This partnership will allow Keppel T&T to tap into the opportunities offered by the rapid growth of Indonesia and strengthen our Southeast Asian distribution network, thereby enabling us to better serve the needs of our customers in the region."

For the past five years since 2007, the Indonesian economy has posted healthy GDP growth rates above 6%, except for 2009, when it grew 4.5%. Indonesia's economic performance in the first half of 2012 has been positive, with a projected overall GDP growth rate of 6.1% in 2012 by the World Bank.

Mr Pang added, "Indonesia's economic growth has been supported by large domestic consumption and rising incomes, particularly in the middle-income segment. The rise in consumerism creates a growing demand for quality logistics services, especially in sectors such as retail and healthcare. As a leading integrated logistics solutions provider backed by 40 years of extensive experience, we look forward to leverage our capabilities to provide value-added solutions for our customers and partners through this joint venture."

The above mentioned joint venture agreement is not expected to have material impact on the net tangible assets or earnings per share of Keppel T&T for the current financial year.