On Friday, Canadian private equity giant CDPQ and Emirati supply chain logistics multinational DP World signed a long-term agreement with Indonesian conglomerate Maspion Group to begin construction on a major international container port and industrial logistics park in Gresik, East Java. Construction expected to begin in the third quarter of 2021, with total investment of up to $1.2 billion, in a deal that is expected to consolidate East Java’s position as a key trade gateway for Indonesia.
The signing ceremony was conducted in Jakarta, alongside Indonesia’s Coordinating Minister for Maritime and Investment Affairs of the Republic of Indonesia, Mr. Luhut Binsar Pandjaitan, and United Arab Emirates’ Minister of Energy and Infrastructure, H.E. Suhail Al Mazrouei, at the Indonesia-Emirates Amazing Week 2021 Building Path Towards Economic Recovery business forum. The agreement was formally signed by Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, and Mason Group Chairman and CEO Dr. Alim Markus.
The agreement is to be structured as a joint venture between DP World and CDPQ’s global investment platform, and Maspion Group, one of Indonesia’s leading diversified and integrated business groups, producing household appliances, flat rolled aluminum, aluminum extrusion, industrial estates, hotels, and banking.The deal is the first of its kind in the Indonesian transportation sector involving a foreign direct investment (FDI) partner and a private sector Indonesian company.
DP World Maspion East Java will become the sole operator of a modern international container port, with design capacity of up to 3 million twenty-foot equivalent units (TEU). DP World and CDPQ will also work with Maspion Group to develop an industrial and logistics park, adjacent to the Container Terminal, with an initial land area of 110 hectares with scope for future expansion.
Since its launch four years ago, the $8.2 billion DP World-CDPQ platform has invested in 10 port terminals globally and across various stages of the asset life cycle. This investment will allow the partnership to pursue its objectives to further diversify its reach in terms of geography and trade lanes. The platform received $4.5 billion in new capital commitments just last September.
Commenting on the agreement on Friday, DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem hailed the partnership with Mason Group as an important development in DP World’s global ports and logistics network.
“Indonesia is rapidly developing as one of the world’s most important economies. This project will create modern, efficient infrastructure, as well as an industrial zone that provides quality logistics. DP World’s business model and vision are aligned with President Jokowi’s [ed. note: Indonesian President Joko Widodo] vision to spur faster economic growth through trade infrastructure development, more investment opportunities, and job creation,” he said.
CDPQ’s first move in Indonesia
“Through this partnership with Maspion, CDPQ is delighted to make its first infrastructure investment in Indonesia, a strong growth market which benefits from favourable structural trends,” said Emmanuel Jaclot, CDPQ Executive Vice-President and Head of Infrastructure. “It also represents an important milestone for our joint platform with DP World with the addition of a first greenfield port to our portfolio of high-quality assets that have demonstrated their resilience over the past year despite important shifts in the global supply chain landscape.”
“Maspion Group is committed to support Indonesia’s sustainable economic development to be aligned with President Jokowi’s grand plan to make Indonesia the fifth largest economy in the world. Surabaya is an important gateway in Indonesia and the existence of this Container Port will further enhance economic development and investment opportunities in Indonesia,” said Dr. Alim Markus, Chairman and CEO of Maspion Group.
Groundbreaking on the Container Terminal is expected to take place in 2021, with commercial operations expected to begin in 2023. The project will develop East Java’s infrastructure as part of President Widodo’s vision to accelerate economic growth through his Indonesia Golden Generation 2045 strategy.
