Indonesia Ready-mix Concrete Market - Growth, Trends, and Forecast (2019 - 2024)

Indonesia Ready-mix Concrete Market - Growth, Trends, and Forecast (2019 - 2024)

  • October 2019 •
  • 67 pages •
  • Report ID: 5826185 •
  • Format: PDF
Market Overview
The market for Indonesia ready-mix concrete is expected to grow at a CAGR of 7.79% during the forecast period of 2019 – 2024. Major factors driving the market studied are the increasing investments in the real estate sector and superior technical properties over normal concrete. Ease of availability of potential substitute is expected to hinder the growth of the market studied.

- By application, the non-residential segment accounted for the largest share, with about 80% of the total value of the market studied, in 2018.
- In the non-residential segment, the infrastructure segment accounted for the largest share, with about 50 % of the total revenue of the market studied, in 2018.

Key Market Trends
Increasing Investments in the Real Estate Sector

- Increase in investments and construction activities in the residential and infrastructure sector is the primary driver for the growth of the Indonesian construction sector. Foreign direct investments in the country are expected to drive the growth of the Indonesian real estate sector.
- The country has eased the regulations by amending the law on public-private partnerships and passing a new land acquisition law, to make the infrastructure sector more investor-friendly.
- The Indonesian Ministry of Communication and Information Technology is encouraging the 100 Smart City Movement. This, in turn, is expected to propel many innovative real estate developments in the coming years.
- New real estate projects in the country have driven the Indonesian property sector in the past few years. The architectural layout of the capital city, Jakarta, has attracted various investors from around the world.
- In December 2018, KEPPEL Land signed an agreement with PT Metropolitan Land (Metland), an Indonesian property developer, to develop a 12-hectare residential site in Metland Menteng township in East Jakarta, Indonesia, with an investment value of up to IDR 5 trillion. KEPPEL Land’s share of the project development cost is about IDR 600 billion.
- According to the Indonesia Investment Coordinating Board (BKPM), in 2018, around 70% of the investments in industrial estates, housing projects, and office space developments are from the foreign companies operating in Indonesia. All such firms are also responsible for 77% of investments in restaurants and hotels.
- Moreover, in late 2018, policymakers announced the plans to cut taxes on luxury properties and revise other tax rules associated with the real estate industry, to support the property investments in the country. This is expected to increase investments in the real estate sector in the country in the future.
- Owing to the increasing investments in the real estate sector in the country, the construction sector in the country is expected to grow during the forecast period. This, in turn, is expected to drive the demand for ready-mix concrete in the country.

Increasing Commercial Construction Activities in the Country

- Since ages, concrete has been the first choice of contractors for commercial development of buildings, and for a large-scale concrete structure, ready mix concrete is the ultimate choice. It is used in the construction of structures, such as office space, hotels, retail, shopping malls, multiplex theatres, etc.
- Growing requirements for space from the e-commerce sector is further propelling the demand in the construction sector. The investment in the private sector has surged, driven by increasing transparency and returns.
- Growth and improvement in the business environment have benefitted several sectors, with Indonesia’s commercial office sector being a prime benefactor. The demand for office space in the country has been increasing, owing to the increasing office relocations.
- According to Colliers International Indonesia, it is estimated that around 540,000 sqm of office space is necessary, to enter in the Jakarta market with a total supply reaching to 10 million sqm in 2019. From 2020 to 2021, a supply of 717,499 sqm is projected to add office stock in Jakarta.
- The rising construction of malls and retail stores across major cities in the country is driving the market for the commercial construction industry. Big developers across the world are focussing on shopping malls business in the country. This, in turn, is expected to increase the presence of malls in the country.
- Around five new shopping centres with a total net leasable area (NLA) of around 350,760 sqm are currently in the pipeline, between 2018 and 2020. Also, six new malls with total NLA of around 225,685 sqm are set to be built in Bodetabek (Bogor, Depok, Tangerang, and Bekasi).
- The retail e-commerce revenue in the country has been increasing significantly from the past few years. This, in turn, is expected to increase the demand for warehouses and offices of the e-commerce companies, across the country.
- In 2018, the retail e-commerce revenue increased by 64.4%, reaching USD 12 billion. It is expected to reach USD 47.1 billion in 2023.
- All the factors mentioned above, in turn, are expected to increase the demand for ready-mix concrete in the commercial sector, during the forecast period.

Competitive Landscape
The Indonesia ready-mix concrete market is consolidated in nature. The market in the country is primarily dominated by top three players, which include PT Semen Indonesia (PERSERO) Tbk, PT Indocement Tunggal Prakarsa TBK, and PT SCG Readymix Indonesia.

Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
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- 3 months of analyst support

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