Jakarta, July 28, 2021 — Indonesia will benefit from a major investment in its express logistics sector to help bridge infrastructure gaps, boosting access to goods and services, and in turn supporting economic growth and job creation at a time when the country is facing significant impacts from the COVID-19 pandemic.
IFC, a member of the World Bank Group, will invest up to 451 billion rupiah (US$31 million) in PT Adi Sarana Armada (ASSA). Beyond growing its core vehicle leasing business, ASSA is looking to scale its express logistics entity PT.Tri Adi Bersama, also known as Anteraja, and broaden its e-commerce logistics footprint in Indonesia. Expansion of last-mile delivery and pick-up services will benefit small and medium sized enterprises (SMEs), key incubators of jobs in Indonesia, as well as millions of female entrepreneurs who rely on the rapidly growing e-commerce market as a key source of trade and income.
Anteraja, the first fully-digitalized, data-driven express logistics provider in Indonesia, employs more than 15,000 couriers and delivers over 700,000 parcel orders per day. It's also affiliated with one of Indonesia's leading e-commerce platforms and one of the largest and tech-driven express delivery companies in China.
"We appreciate the trust and partnership of IFC, member of the World Bank Group, during these unprecedented times and we welcome IFC who will become our shareholder upon conversion of the convertible bonds," said Prodjo Sunarjanto, President Director, ASSA. "This timely support will help ASSA continue building more sustainable growth in all parts of our businesses and advance our company's performance."
IFC's investment was made by way of a convertible bond issuance under the supervision of Indonesia's Financial Services Authority, otherwise known as OJK, and is one of the first since recent 2019 regulatory updates were put in place to bolster the rights of minority shareholders, attract international investors and deepen capital markets in Indonesia. The IFC investment in ASSA is aligned with its strategic priorities in Indonesia and is an example of how the private sector can be leveraged to improve logistics and connectivity, providing a pathway to supporting economic growth.
"This crucial investment will unlock access to goods and services and will also benefit millions of people who live outside Indonesia's major population centers, including those in poorer regions who often also face higher prices due to logistics constraints and transport costs," said Alfonso Garcia Mora, IFC Vice President for Asia and the Pacific. "The COVID-19 pandemic is exacting a huge human and economic toll on the people of Indonesia, making investments like this, which will help preserve and create jobs, even more critical."
Mass digitalization and internet penetration is driving the development of Indonesia's e-commerce market, which currently accounts for US$12 billion per year in gross merchandise value, projected to grow to US$30 billion per year by 2025. Competition and digital access initiatives among e-commerce platforms has also opened doors for millions of female entrepreneurs seeking viable avenues for home-based business.
Online sales growth in 24 out of Indonesia's 34 provinces is now outpacing that of the capital Jakarta, improving access to goods and services for Indonesians across the archipelago and accelerating the development of SMEs. This growth in regions also shows e-commerce can at the same help spread prosperity. However, e-commerce progress may be hindered as demand for logistics services outpaces the capacity of existing, traditional logistics businesses to transport goods.
By financing ASSA and supporting the scale-up of Anteraja's service coverage and technology footprint, IFC's partnership with ASSA will help accelerate the development of Anteraja's ecosystem of higher quality and cost-efficient logistics solutions and address a express logistics supply gap in the market.
The IFC investment is in the form of a subscription of two-year, zero-coupon, listed convertible bonds issued by way of a rights offering by ASSA.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
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About ASSA
Established on 17 December 1990, ASSA began its business as a vehicle rental company with a nation-wide network. As time went on, the company grew and branched to other business lines, including vehicle rental service, vehicle auction service, driver services and logistic services that lean towards end-to-end logistics. On 12 November 2012, ASSA held its IPO and released 40.03 percent of its shares to the public. Currently, there are 25 thousand fleet-vehicles under ASSA's rental business. ASSA also manages more than four thousand drivers which are supported by 45 business networks spread across Indonesia which cover more than 1,800 companies throughout the country. ASSA also has a complementing car-sharing service under the ShareCar application platform.
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