Businessmen Call for Resumption of Air and Sea Links between Manado and Davao

Date Published
January 08, 2021
BIMP-EAGA businessmen are eager to revive connectivity between Manado and Davao to spur trade and investment in the two cities. Photo credit: Asian Development Bank.

Indonesia and the Philippines should aim for stronger air and sea links between Manado and Davao to take advantage of ample trade opportunities in agriculture and processed food available in the two cities, representatives from the public and private sectors said in a recent webinar.

During the webinar, Reconnecting Manado–Davao Trade Cooperation, on 10 December 2020, government and private sector representatives pinned their hopes that Jakarta-based Sriwijaya Air and Manila-based shipping operator Reefer Express Line Filipinas, Inc. would serve the route.

Manado is the capital of the Indonesian province of North Sulawesi, while Davao is the economic center of Mindanao in the Philippines. North Sulawesi and Mindanao are part of BIMP-EAGA and have a trading history that goes back centuries.

Spurring trade and investment

Dicky Fabrian, Indonesia's consul general in Davao City, stressed the importance of reviving the air and sea links between the two cities to spur trade and investment.

He also encouraged traders to explore business opportunities in the two areas. “I encourage small- and medium-sized enterprises to seize opportunities in trade cooperation because both regions have so much potential.”

John Carlo Tria, former president and now vice-president for trade and commerce of the Davao City Chamber of Commerce and Industry, also pushed for the revival of sea and air links between Manado and Davao, noting these are key to boosting trade and investment, creating jobs, and spurring tourism.

Air connectivity

Flights between Manado and Davao stopped since March 2020 because of the coronavirus disease (COVID-19) pandemic. The route was being serviced by Indonesian airline Garuda.

Fabrian is hopeful Sriwijaya Air would service the route.

Yustiar Rizawan, head of digital marketing and promotion at Sriwijaya Air, said while there are no firm plans to start servicing the Manado–Davao route, the airline is keen to explore opportunities to service the route whether it is for passengers, cargo, or charter flights.

Before the pandemic, Sriwijaya Air carried more than 950,000 passengers per month to 53 destinations within Indonesia and three countries in the region. It uses the Soekarno Hatta International Airport in Jakarta as its hub.

Sea connectivity

Low trade volume, meanwhile, became an issue for Reefer, which did a trial run for the BIMP-EAGA route in July 2019. The company was supposed to operate the service in 2020 but will instead resume the service early this year.

Felix Ishizuka, chief executive officer of Reefer, said sustaining the service became a challenge because of low cargo traffic, which he traced to similar commodities produced by North Sulawesi and Mindanao.

This despite Reefer expanding the route to include Brunei Darussalam and Viet Nam in hopes of widening the range of goods their vessel could carry along the route as well as the market for the goods.

The BIMP-EAGA route starts in Davao then to Bitung in North Sulawesi, Ho Chi Minh City in Viet Nam, Muara in Brunei Darussalam, Lahad Datu in Sabah, back to Bitung, and then Davao.

While Reefer stopped the service, Ishizuka said the company continues to promote the service to businesses that want to explore trade opportunities in countries along the route.

He said Reefer plans to add a stop in Port Klang in Malaysia to expand the service further and the goods the vessel could carry. He said Reefer is in talks with “a Malaysian interest,” noting the high traffic of containerized cargos between Port Klang and Mindanao. “Once we’ve tied the contracts between my company and this Malaysian entity, the Bitung call will be relaunched again.”

Reefer deploys the MV Baltic Summer for the service. The vessel can carry 290 TEUs (twenty-foot equivalent unit) containers.

Apart from shipping, Reefer also offers chartering, bunkering, crewing, warehousing, freight forwarding, and custom's brokerage services. The company was set up to serve the BIMP-EAGA route.

Ample opportunities

Private sector representatives, meanwhile, stressed there are ample trade opportunities in North Sulawesi and Mindanao.

Jemmy Tumimomor, president of the North Sulawesi Chamber of Commerce and Industry, noted the province could export the following products to Mindanao: cloves, coconut and its derivatives, nutmeg, coffee beans, shallots, leaks, potatoes, corn, palm sugar, tuna, tilapia, shrimp, batik, mangosteen juice, nutmeg syrup, cassava chips, cake rolls, banana chips, garfish sauce, skipjack sauce, among others.

Tria pressed businesses to take advantage of opportunities in Mindanao in banana, pineapple, coffee, cacao, fishery products, foods stuffs, high-value crops, candies, food supplements, coconut oil, desiccated coconut, and coconut water. He also noted opportunities in animal feeds, rubber, personal care and sanitation products, activated carbon, corrugated boxes, plastic bottles and packaging materials, among others.

There are also business and investment opportunities in the services sector, specifically the business management sector, which includes animation services, online marketing platforms, education and training platforms, and software products for accounting and productivity, he said.

He also noted opportunities in real estate and tourism.

The webinar was organized by Indonesia’s Consulate General in Davao City in collaboration with the North Sulawesi Chamber of Commerce and Industry and the Davao City Chamber of Commerce and Industry.