The group wants the cash-strapped shipping line to transport its products domestically.

State-owned enterprises minister Dahlan Iskan expects DL to become PIHC's subsidiary by the end of this year.

"DL has large-capacity ships so Pupuk Indonesia will have no difficulty distributing its fertiliser nationwide," he said.

PIHC produces nearly 17m tons annually, but can carry only 1m tons on its own ships.

It charters in the remaining capacity, but owning more vessels would be more economical, it believes.

DL