Background and Challenge

A leading global shipping and ports operator was evaluating an opportunity to invest in a partially completed inland “dry” container port development in Indonesia. Given the significant capacity limitations which was already constraining the country‘s principal container port, the new inland “dry” port project was launched to provide an alternative logistics channel for inbound and outbound container volumes and to reduce the costs and transit times for containerized imports and exports in West Java.

This project was the first inland “dry” container port development of its kind in Indonesia, and because it had only been partially completed and soft-launched, the client needed to gain a detailed view of the medium and long-term commercial viability of the project. If the project was not likely to draw sufficient container volumes, it would be commercially unviable and the client would not want to make an investment. On the other hand, the client wanted to know if the project did seem feasible and attractive given its other benefits -- and also understand the appropriate valuation ranges based on different scenarios. To determine the best way forward, the client engaged L.E.K. Consulting to advise them on the diligence.

Approach and Recommendations

Our team followed a two-phased approach. The first phase included extensive primary and secondary industry research and analysis of the data gathered. The team created a robust fact base and deep set of market insights. The research and analysis addresses a number of key questions:

  • How large is the container shipping market and how fast is it likely to grow?
  • Who are the new port’s key customers, how many would use the new port facility, and on what occasions?
  • What overall container volume share would the new port likely be able to capture?  By when?  What additional investments/services would be required in the new port to drive sufficient customer migration to the new facility?
  • How might the new port’s success impact existing stakeholders linked to the existing port?  How likely is it that the new port results in more competitive prices and/or fees for container handling and storage services at both ports?
  • What is the expected volume forecast for the new port, and what are its resulting revenues likely to be? What are the key sensitivity drivers that impact revenue?

In the second phase, the team further analyzed and synthesized findings from Phase One to develop an overall view of the commercial viability and likely revenue potential of the business.


As a result of the project and its outputs, the client gained significantly greater confidence in the commercial viability of the new port and the likely valuation ranges they should consider in their investment negotiations. Importantly, the client was able to validate specific assumptions which had been made in their prior internal business case evaluations and get more comfortable around key issues of importance before going to the company’s internal corporate investment committee with their recommendation to proceed with the investment. 

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