ABOUT BALIKPAPAN

we will share to you about balikpapan province, which could be access from east java because main gate for export and import from/to balikpapan are from surabaya - east java.

1. Back Ground

1.1 Balikpapan, East Kalimantan Province

Balikpapan, the second largest city in East Kalimantan province having its capital city at Samarinda, is home to the majority of Foreign and Government own companies in the sector of Oil and Gas as well as Mining industries. Due to importance and strategic location, companies like PERTAMINA, TOTAL, SHELL, CHEVRON, THIESS, Kaltim Prima Coal, Halliburton, Schlumberger, had opened their representative office in Balikpapan. Balikpapan offers attractive opportunities for further business expansion in the logistic industry like project cargo (OOG), air freight (chartered), custom house brokerage and trucking services. Currently various local and global player in the logistic industry have existed in Balikpapan offering their service to the mining and oil/gas segments, but as Energy sector becoming very important, the Logistic activities have the tendency to grow even bigger in the upcoming years.

1.2 People
Ideally, Balikpapan branch should be manned by 1 Sales representative with at least 5 years minimum experiences in the logistic of Oil and Gas, Mining industry and have local contacts / networking to penetrate the market.

1. Business Overview

1.1 Balikpapan

East Kalimantan province where Balikpapan city is located is the biggest province in Indonesia, with area size of 245,237.80 Km² or one and half times bigger then combined Java and Madura island, accounting for 11 % of the total area of Indonesia. East Kalimantan province has a very rich natural resources like mining (gold, coal and oil/gas), as well as forestry natural resources.

Geographically, Balikpapan city is located between 1,0 to 1,5 South Latitude and 116.5 to 117.5 East Longitude, with area size of 50,330.57 Ha or 503.3 kilometer square with below boundaries:
· North with Kutai district.
· South with Makassar traits.
· East with Makassar traits.
· West with Pasir district
Although the capital city of East Kalimantan is Samarinda, but still majority of Mining and Oil/Gas have their representative offices in Balikpapan and very few in Samarinda.
Balikpapan City is further split into 5 smaller areas being the East, the South, the Central, the North and the West of Balikpapan.
As for the population, Balikpapan is very heterogenic consisting of various ethnics from Sulawesi, Java, Sumatra and Kalimantan. As per 2006 the total population of Balikpapan is 508,120 people, an increase of 1.52% from 2005 population of 500,406 people. South Balikpapan area is by far the biggest population compare to the other 4 areas, contributing 34% of total Balikpapan population.

1.2 Industry

The industry in East Kalimantan province within the last 5 years had grown very well with an average of 9.23% per year while the investment for small enterprise starting from 1998 to 2002 had grown to 49,9%, with medium enterprise to 2 % per year and large scale investment to 5.88% per year. The industrial estate had also grown very significant from 140 in 1998 to 482 in 2002. Refinery industry has played a very important role to the contribution of growth in East Kalimantan province reaching 45.5% of the East Kalimantan provincial revenue, where Oil and Gas contributes 38% and the non-Oil and gas contributed 7.5%.

For the Oil and gas industry in East Kalimantan, some of them are:

1) Oil Refinery
PERTAMINA Unit 5 refinery in Balikpapan is one of the 7 refinery owned by Government. It occupies the land size of 2,5 kilomtere square which produce 260,000 of oil (or 26% of national production)

2) LNG refinery
LNG is being produced by PT Badak NGL & Co. located in Bontang City. Which build and operated since 1977, transported using train with capacity of 1,6 million ton/year.

3) Methanol
Bunyu refinery, also owned by PERTAMINA, produced methanol through Joint Operation with MEDCON, with production reaches 1,000 ton per day.

For the Non Oil and gas industry in East Kalimantan, are:

1) Fertilizer
PT Pupuk Kalimantan Timur (East Kalimanta Fertilizzer Industry) established in 1977 is located in Bontang. Until 2000, it has operated 3 Ammonia factories with total capacity of 1,5 million ton per year and 4 factories of “urea” fertilizer with capacity of 2,5 million ton per year, with the aim of producing total 3 million ton of “urea” per year.

2) Coal
The biggest mining coal company is Kaltim Prima Coal, a public owned and subsidiary of Bumi Resources (a Bakrie and Brothers group of companies). It is located in Sangatta, some 310 km north of Balikpapan. KPC has a number of operating pits in the Sangatta mining area mined directly by KPC and by contractors. The Coal are shipped at the Tanjung Bara Coal Terminal (TBCT. The TBCT stockyard has a total live capacity of 800,000 ton which is expandable to 1,200,000 ton
3) Pulp and Paper
PT Kiani Paper, is the only pulp and paper industry in East Kalimantan that shows good growth. It produces 525,000 tons of pulp and employs 1,800 workers. The product is 96% exported abroad and PT Kiani is investing USD 177 million for expansion of its factory.

4) Wood working Industry
With the increase global and domestic demand of wood product like Plywood, Veneer, Sawn Timber, Block Board, Particle Board, Chip Wood and Moulding, many medium to large enterprise in the wood working industries have reaped the benefits and expand their business accordingly.

5) Small industry / handicraft
For small industry in East Kalimantan, they normally focus on handicraft like Sarong, wooden statute, etc.


2. Transport & Port Capability

2.1 Infrastructure

The provincial road infrastructure in East Kalimantan reaches a total of 8,189 Km, while the ratio of road length to area size reaches 52,5 Km per 1000 Km². In short these main roads are divided in 3 main routes, mainly:

1) Southern route, connecting: South Kalimantan - Batu Aji/Kerang Dayu - Tanah Grogot - Kuaro - Penajam - Balikpapan - Samarinda - Bontang - Sangatta - Muara Wahau - Tanjung Redep - Tg Selor2) Central Route, connecting: Samarinda - Tenggarong - Kota Bangun - Melak - Barong Tongkok – Central Kalimantan.3) Northen Route, connecting: Samarinda - Sangatta - Muara Wahau - Berau – Bulungan. This route is now expande to cover for Malinau and Nunukan disctrict.At the moment the Governor of East Kalimantan is proposing to build a toll road connecting the three main city that is Balikpapan, Samarinda and Bontang.

Sea Port
The Semayang Port, located in the southern side of Balikpapan is operated under PELINDO IV, an Indonesian state owned company which handles East Indonesia region. Currently PELINDO is developing an industrial estate called Karangau inside the Port as means to integrate the industrial and Port activity giving easy and fast access to Port. There are 6 ducks now inside the Port, belongs to PT Inne Dong Hwa for plywood, PERTAMINA for Oil, PETROSEA for Oil, PT Bakal Makmur Sejahtera for Coal and PT Dermaga Prakasa Pratama for Coal

Current shipping lines active in Semayang Port – Balikpapan are :
1. Hapag Lloyd – Branch Office
2. Line Fast – Branch Office (Break Bulk)
3. Djakarta Lloyd – Branch Office (domestic)
4. Temas Line – Branch Office (domestic)
5. Aquaria Shipping (Tug Boat and Supply vessel) – Branch office
6. Samudera Indonesia Lines – Branch Office (domestic)
7. Salam Pacific Indonesia Lines (SPIL) – Branch office
8. Marindo Pacific Lines – Branch office specialize in bulk cargo, coal, stones, sands
9. Andhika Lines – Branch office
10. Karana Lines – Samarinda Office
11. Meratus Lines – Samarinda Office

Airport:

Balikpapan has an International Airport called Sepinggan International Airport, which is located 15 km from the city. This airport can be landed by Boeing 737 and 747, and has international direct routes mostly to Singapore and domestic routes going to Jakarta and Surabaya and various cities in East Indonesia area like Ujung Pandang and Denpasar. Foreign airline like Silk and domestic airline like Garuda, Lion Air, Merpati, Mandala, and others are having regular schedule to/from Balikpapan. Chartered freighter also landed in Sepinggan International airport, bringing machineries or spare parts for Oil/Gas and Mining industry.
Trucking:

Trucking service is provided by local private companies to support inland haulage from Port to various destinations in East Kalimantan. Some have project capabilities handling temporary import and OOG cargo while others have Dump Trucks for coal and mining products. Some trucking company for Export and Import activity are PT Mandala Transindo, CV Annisa Trasnport, PT Bangun Citra Mahakam, UD Manuntung Raya, etc.

Chartered Airline:

For special case like urgent cargo – spareparts or machineries - needed by Mining and Oil/gas companies, there are need to use freighter (chartered) airline for this purpose. Few forwarding also becoming specialize agent for this type of shipments, like PT Intipratama, who is often chartered Antonov-12 and Antonov-32 from Singapore just for this type of shipments.