Indonesia's Shipbuilding Industry at a Crossroads: Policy Overhaul Needed After Historic Shipyard Bankruptcy

Date: July 16, 2026

Source: ANTARA News

Category: Maritime Industry & Investment

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Indonesia's shipbuilding industry is facing a critical moment following the bankruptcy of PT Dok Perkapalan Surabaya (DPS) , a shipyard with a 116-year history that stands as one of the country's oldest industrial institutions. Industry leaders are now issuing urgent calls for comprehensive policy support, warning that without decisive government intervention, further erosion of Indonesia's maritime industrial capacity could follow.

A Wake-Up Call for Policymakers

The Indonesian National Shipowners' Association (INSA) and the Indonesian Shipbuilding and Offshore Association (Iperindo) have issued a joint call for strengthening the national shipbuilding industry through supportive and sustainable policies. Both organizations emphasized that strengthening domestic shipbuilding capacity is essential to supporting Indonesia's national logistics system — a critical priority for the world's largest archipelagic nation.

"The bankruptcy of PT DPS serves as a warning that the shipbuilding industry requires supportive and sustainable policies, considering the strategic role of shipyards in an archipelagic country like Indonesia," said INSA chairperson Carmelita Hartoto in a statement released on Thursday from Medan, North Sumatra.

Iperindo chairperson Anita Puji Utami underscored the broader implications, stating that "the loss of one of the country's historic shipyards is not merely an issue affecting a single company, but also involves the loss of industrial capacity, skilled workers, and the national supply chain that has been built over decades." The bankruptcy of PT DPS, she noted, should serve as a serious warning for all stakeholders that the national shipbuilding industry is confronting significant structural challenges.

Unique Structural Challenges in Shipbuilding

Hartoto highlighted the distinctive characteristics that set the shipbuilding industry apart from most other manufacturing sectors. The industry is simultaneously capital-intensive and labor-intensive, demands long-term investment with a relatively long payback period, and must comply with various international safety and classification standards that impose rigorous technical and quality requirements.

These inherent characteristics mean that shipyards cannot simply compete on short-term cost advantages. "Given those characteristics, the development of the shipbuilding industry requires consistent policy support to enable national shipyards to remain competitive," Hartoto explained. She acknowledged that former President Joko Widodo demonstrated strong commitment and political will to develop the national shipbuilding industry during his tenure, but emphasized that this commitment must now translate into concrete, actionable policies.

"The challenge now," Hartoto said, "is realizing that commitment into policies capable of addressing the real issues faced by the shipbuilding industry, ranging from raw materials to financing."

Indonesia's Broader Maritime Ambitions

The call for stronger policy support comes against the backdrop of Indonesia's broader maritime ambitions and strategic initiatives. As an archipelagic nation of over 17,000 islands, Indonesia depends heavily on maritime logistics for both domestic connectivity and international trade. The government has previously announced ambitious plans, including the construction of 1,582 fishing vessels by 2028, and has repeatedly identified shipbuilding as a key pillar of national logistics system development.

Strengthening the national shipbuilding industry is, as Hartoto put it, "one of the main prerequisites for realizing Indonesia as a sovereign maritime nation." This vision encompasses not only defense shipbuilding but also the commercial vessel sector that underpins Indonesia's domestic shipping, fishing, and offshore industries.

Opportunities and Implications for Foreign Investors

For foreign investors in the maritime and industrial sectors, the current situation presents both risks and strategic opportunities. The pressure for policy reform may lead to new incentive packages, innovative financing mechanisms, and technology transfer programs aimed at revitalizing and modernizing Indonesia's shipbuilding infrastructure. International shipbuilders, marine equipment suppliers, maritime technology companies, and engineering firms may find partnership and co-investment opportunities as Indonesia seeks to close competitive gaps with regional shipbuilding powerhouses such as South Korea, China, and Japan.

The coming months will be crucial in determining whether Indonesia can translate its longstanding maritime ambitions into effective industrial policy — and whether the shipbuilding sector can recover and modernize after the loss of one of its most historic and strategically significant institutions.

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*Keywords: Indonesia shipbuilding, maritime industry Indonesia, INSA, Iperindo, shipyard investment, Indonesian logistics, maritime nation, Southeast Asia shipping, PT DPS, shipbuilding policy*