Shipbuilding industry struggles with persistent weak demand

Indonesia's shipbuilding industry is grappling with a lack of domestic orders for ship construction that has persisted since the coronavirus pandemic. This shortage of orders has put pressure on several shipyards and could lead to job losses across the sector, as reported by the Indonesian Shipbuilding Association (Iperindo). Iperindo chairwoman Anita Puji Utami stated that industry players are currently surviving by focusing on maintenance services for income.

While there is ongoing maintenance and minor repairs, Anita expressed hope for new ship construction within the country in the future. One of the challenges hindering the industry's recovery is the importation of used vessels from countries such as Japan and China. The demand for domestic construction of new ships is crucial for maintaining local supply chains and generating more jobs for workers involved in direct and subcontracting roles.

Anita highlighted that the muted local orders have directly affected the industry's workforce, with some companies opting to furlough employees to cut operating and overhead costs.