Imported cotton find new home in West Java city of Cikarang

Gerbang Teknologi Cikarang (GTC) seeing rise in the number of clients accessing the logistics storage center (PLB) to purchase cotton, from Cikampek located close to the dry port to Bandung some 112 kilometers away has launched its first logistics storage center (PLB) to supply raw material for the local textile industry. Imported cotton has found a new home in the West Java city of Cikarang.

The company said that the new storage center would help local businesses secure cotton in a more affordable way, since most of the commodity for local use was still stored in Malaysia.

The firm — a sister company of Cikarang Inland Port that runs the Cikarang Dry Port in Cikarang —joined other major firms establishing PLBs to ease goods procurement and reduce dwell times at seaports.

It has prepared a total of four hectares of land at the port for the storage purposes and is already operating the first center. GTC commercial general manager Imam Wahyudi said that the first center could store up to 2,500 tons of cotton and was currently running at half capacity.

Imam said that about 40 percent of cotton entering Southeast Asia goes to Indonesia, amounting to 650,000 to 700,000 tons of cotton. When the potential market is in Indonesia and the cotton can enter Indonesia directly why they should pay Malaysia? Once it enters Indonesia, it can be delivered more easily to various parts of the country.

GTC is now building a second cotton storage center, which is expected to enter operations in 2017. Similar centers to store other commodities are set to follow in the coming years.

The government’s recent economic packages to boost the competitiveness of domestic industries and create a more investor-friendly business climate encourage the construction of PLBs.

President Joko “Jokowi” Widodo simultaneously launched 11 storage centers in March, including the one run by GTC.

Goods can be stored at the centers for up to three years and will be exempted from import duty and import-related taxes during that period, according to a 2015 regulation from the Finance Ministry.

But Indonesia still lags behind neighboring countries in port dwell times. Dwell times at the country’s primary seaport, average 4.3 days, while those in Singapore and Malaysia stand at 1.5 days and three days, respectively.

Cikarang Inland Port marketing executive Rio Rivai said that it was moving toward a paperless system to make goods processing at the Cikarang
Dry Port more efficient and to alleviate Jakarta’s long dwell and goods processing times.