Nelly to resume coal transport once coal market recovers

By Brigida Ernestina Elu Wea

IDX-listed shipping company PT Pelayaran Nelly Dwi Putri Tbk has suspended its coal transport services for nearly two years due to the coal market downturn, hoping to resume the business once the coal market recovers.

Pelayaran Nelly President Director Tjahja Tjugiarto said on Monday that the company would only resume the coal transport services if the client agrees to a long-term contract. He acknowledged, however, that it is currently difficult to get client willing to commit to a long-term contract as many coal miners have been badly affected by the current coal downturn.

?We have suspended coal transport (services) for nearly two years. We?re now transporting wood and rock split,? Tjahja said.

?But there will certainly be opportunities (to resume coal transport business) once the coal market recovers. But we will not take spot price policy in contracts with clients because it?s uncertain. We want long-term contract although it?s now difficult to get a client as many coal players have been hit hard,? he added.

Pelayaran Nelly operates 33 tug boats and 35 barges. Aside from revenue obtained from the transport of wood and rock split, subsidiary ship maintenance subsidiary PT Permata Barito Shipyard is expected to contribute around 10 percent to total revenue this year, Tjahja said, but stopped short of disclosing the revenue target.

Pelayaran Nelly has allocated Rp 15-20 billion for capital expenditure this year, mostly to be used for refurbishment of its vessels or possible lease of new vessels from third parties to meet demand from clients.

Editing by Reiner Simanjuntak