Construction Equipment in Indonesia A Market Appraisal - April 2013

Construction Equipment andBuilding Material Machinery

Construction Equipment in IndonesiaA Market Appraisal - April 2013

On the occassion of bauma 2013 partner country Indonesia

Contact: Sebastian Popp E-Mail: [email protected]

www.construction-ic.com © Timetric Ltd.

Market Overview

Economic Environment

Industry Environment

• Construction

• Materials

• Mining

Competitive Environment

• Supply-side

• Demand-side

Market Size

• Overview

• Building Construction Equipment

• Earthmoving and Tunnelling Equipment

• Road Building Equipment

• Building Materials Equipment

• Mining Equipment

Appendix

• Definitions

• Research Methodology

• About Construction Intelligence Center

Indonesia, a sprawling archipelago of around 1.9 million square kilometres and with a population of some 245 million people, is increasingly being considered alongside the BRICs (Brazil, Russia, India, China) as an emerging market with the potential to be a major global economic heavyweight in the coming decades.

The country’s well-balanced economy has been recording solid rates of growth in recent years, averaging over 6%, and it came through the global financial crisis relatively unscathed. Foreign investment is also growing rapidly, and policymakers are keenly focused on boosting economic growth. Indonesia also now has a firmly entrenched democracy, which is increasing the prospects for continued political stability in the coming decades.

However, there are risks. Indonesia’s infrastructure is underdeveloped and in need of massive investment. Although the government has set an ambitious plan to address this issue, the required improvements to transport links, energy and communications will take time.

Corruption is also a major impediment to growth and an additional cost burden that deters investment spending. There have also been worrying signs of growing nationalism in government policy, particularly regarding the regulatory environment for the mining sector, and this is undermining confidence.

Nevertheless, there is no denying Indonesia’s huge potential for growth, not only in exploiting its vast reserves of national resources, but also in construction, particularly in developing the country’s infrastructure.

Indonesia snapshot

Indonesia in figures (2012)

Population 245 million

GDP (nominal) USD910 billion

GDP growth 6.2%

Exchange rate IDR9,380:USD1

Inflation 4.5%

World Bank Doing Business rank 128th (out of 185)

Transparency International Corruption Perception Index rank

118th (out of 176)


Indonesia’s economic growth is forecast to accelerate over the coming five years, averaging around 6.5%, driven by rising investment and industrial expansion. The construction sector will also be a key driver of growth, with construction activity growing at a faster rate than the overall economy. This construction expansion will be supported by the government’s massive infrastructure investment plans under its IDR4,000 trillion (around USD428 billion) Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI).

This is set to drive up demand for construction equipment, particularly small and medium-sized excavators, bulldozers, cranes, tractors and dump trucks. It will also boost demand for equipment for construction materials manufacturers. Other construction sectors, particularly residential and commercial, will also be thriving amid the expansion in the economy. Indonesia’s large mining sector will also be a major source of demand for heavy equipment.

Prospects for continued rapid growth in Indonesia’s mining sector have been dampened recently by the drop in commodities prices, particularly for coal. Nationalistic policies have also undermined foreign miners’ confidence. However, with Indonesia’s plentiful reserves of major commodities and its close trade links with China, its growth potential means that it will remain an attractive proposition to mining firms.

By 2017 Indonesia’s construction equipment market value is forecast to reach USD6.84 billion, up from an estimated USD4.2 billion in 2012. This includes the value of building construction equipment, earthmoving and tunnelling equipment, road building equipment, construction materials manufacturing equipment, and mining equipment.

Indonesia forecast summary


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Indonesia has a well-balanced economy, with strong services, manufacturing and construction sectors playing key roles in terms of output and employment alongside the traditional agrarian sector.

The economy bounced back strongly after the disastrous impact of the Asian financial crisis in the late 1990s, during which the economy shrank by 13% in real terms. Over the past 10 years Indonesia’s real GDP has expanded at an annual average rate of 5.7%, an impressive pace that only lags behind its Asia peers of China and India. During this 10-year period, Indonesia’s nominal GDP increased from USD235 billion to USD940 billion, and per capita GDP soared from around USD880 to USD3,600.

The rapid growth in the past decade is attributed largely to the expansion in investment and private consumption. Gross fixed capital formation has registered average annual growth of 8% over the past 10 years, while private consumption rose by 6.5% a year on average during the same period.

It is mainly owing to the fact that Indonesia has a relatively large domestic economy and a lower reliance on external trade than its South-East Asian counterparts that it managed to continue posting healthy growth in 2009, while others such as Thailand and Malaysia experienced economic recessions amid the worst of the global financial crisis.

Indonesia has a well-balanced and resilient economy

Strong domestic demand has helped to

insulate the economy from global

weakness

Figure 1: Real GDP growth

Source: Bank Indonesia


Indonesia’s economy was a stand-out performer among its Asia counterparts last year, when it posted another strong performance, expanding by 6.2%, down only marginally from 6.5%, according to Statistics Indonesia.

The growth in 2012 was led by robust private consumption and strong investment, which grew by 5.3% (adding 2.9 percentage points to overall growth) and 9.8% (2.4 percentage points) respectively in 2012.

This domestic strength was offset by weakness on the external side; exports growth decelerated sharply to 2% in 2012 from 13.6% in 2011, owing to sluggish demand among major trading partners, such as the US, Europe and China.

Imports growth also moderated, to 6.6%, but with exports slowing at a faster pace than imports, net exports were a drag on growth during the year, subtracting nearly 1.5 percentage points from overall growth in 2012.

On the production side, leading contributions to growth in 2012 came from a number of services, such as trade (which grew by 8.7%) and transport and communications (10%). Manufacturing expanded by 5.7%, while the construction sector posted strong growth of 7.5%. Mining and quarrying (excluding petroleum and gas) expanded by 6.4%.

Slight slowdown in 2012, but continued resilience

Although slowing marginally from 2011, the

economy posted another year of solid

growth in 2012, expanding by 6.2%

Figure 2: Recent growth in key sectors




The Indonesian government has maintained a prudent fiscal policy stance in recent years, which, along with a well crafted monetary policy, has put the economy on a strong and stable growth path.

The government has succeeded in consistently maintaining the deficit below 3.0% of GDP over the past 10 years. It has also managed to reduce its debt burden from a peak of 77% of GDP in 2001 to just 24% in 2012. Interest payments, which peaked at about 5.3% of GDP in 2001, have also gradually been brought down, to just over 1% of GDP in 2011, giving the government much needed room for reallocating resources for development purposes.

Based on the recently approved budget estimates provided by the Ministry of Finance, government revenue (including grants) is expected to grow by 11% in 2013, compared to 16.1% in 2012. Income tax is projected to grow at a slower pace of 11.8% in 2013, from 18.9% estimated in 2012.

On the expenditure front, the government projects that its overall outlays in 2013 will grow by 7.1% , slowing from an increase of 17.2% in 2012. Capital expenditure is expected to grow by 15% on the back of planned infrastructure development. Despite this expansion, the government is targeting a budget deficit equivalent to 1.7% of GDP in 2013.

It is partly owing to the improvement in the government’s fiscal health that international credit ratings agencies have upgraded Indonesia’s sovereign credit ratings, with Fitch and Moody’s returning investment grade status to Indonesia.

Fiscal improvements lead to credit upgrades

The government’s fiscal position has

improved, supporting recent credit rating

upgrades to investment grade

Figure 3: Indonesia’s government debt

Source: Directorate General of Debt Management, Ministry of Finance


Although the government has managed to improve its overall fiscal position, it continues to spend heavily on a subsidies programme to contain fuel price inflation, and this is a drain on its resources. In 2012, the government spent IDR306 trillion (USD33 billion) on energy subsidies, compared with its budget plan of IDR210 trillion.

With oil prices hovering around USD110 per barrel, the government projects that the overall energy subsidy will reach IDR274.7 trillion in 2013, with IDR193.8 trillion on fuel subsidies and IDR80.9 trillion on electricity subsidies. However, it has based this on some favourable assumptions: that average international oil prices will fall to USD100 per barrel and that the subsidised fuel requirement will edge up by 1.6%, to 46 million kilolitres.

Despite having a policy objective to link retail fuel prices with global energy prices, the government is not expected to try to push through any major cuts in the subsidies programme at least until after the 2014 presidential elections. The government was forced to scrap such a plan in early 2012 owing to a failure to gather sufficient political support.

This distortionary policy has contributed to a sharp expansion in fuel consumption over the past few years, and partly as a result, Indonesia is now a major net-importer of energy.

The country’s oil trade deficit reached USD20.3 billion in 2012, up from just USD3.3 billion in 2004, a trend that has been reflected in the overall deterioration in the country’s external position.

Oil subsidies remain a bane

Continued government intervention in the

market to keep fuel prices low is proving

costly, and is wasting fiscal resources

Figure 4: Trade in oil [USD Million]



Indonesia’s central bank, Bank Indonesia, has been determined to provide some support for the domestic economy in recent years amid the difficult external environment. In this vein, it cut its main policy interest rate from 9.5% in late 2008 to a record low of 5.75% in early 2012. It has kept the rate at this low level since then.

BI has been able to keep interest rates low as inflation has remained generally tame over the past year, in part because of the government’s costly programme of subsidised fuel prices.

Consumer price inflation hit 7% on a year-on-year basis in early 2011, but it slowed to 3.6% in February 2012, and has stayed within the central bank’s target range of 3.5% to 5.5% since then. However, prices increased by 5.3% in January 2013, primarily owing to damage to food crops caused by floods, and with the rupiah losing value against major currencies, the central bank may soon be compelled to raise the cost of borrowing.

Indeed, there are a host of factors that could drive prices to rise at an accelerated rate in the coming year or so. Resulting in a tightening in monetary policy. Firstly, the government has approved sharp increases in minimum wages, which will feed through into higher prices for goods and services. Secondly, restrictions are being imposed on cheap foreign imports. Thirdly, commercial electricity prices are set to rise this year.

Supportive monetary policy

Low inflation has enabled BI to keep

interest rates at record lows, but some

tightening is expected in 2013

Figure 5: Inflation and interest rates



The rupiah has recorded a great degree of instability in recent years, and in 2012 it was one of the worst performing currencies in Asia, losing around 7% of its value against the US dollar.

The exchange rate was particularly volatile during the global financial crisis, as investors sought security in financial safe havens. The rupiah depreciated by around 30% between August 2008 and February 2009, plummeting to IDR11,800:USD1 at a time of great economic uncertainty. However, it regained ground in 2010 as the economy outperformed its peers.

This recovery came to an end in mid-2011, as external sector uncertainty intensified owing to the aggravated Eurozone crisis, a sluggish economic recovery in the US, weakening in the Chinese economy and falling prices for Indonesia’s key export commodities.

In addition to these external factors, the rupiah has also been impacted recently by high demand for imported commodities and slowing export growth, which resulted in disequilibrium in the currency market and a deterioration in the current account.

In March 2013, the rupiah was standing at around IDR9,640:USD1, with some support coming from the continued inflow of foreign funds into the domestic financial market, driven by strong domestic economic fundamentals and the attainment of investment grade status.

The rupiah has been volatile

The rupiah is a volatile currency, and has

been one of the worst performing

currencies in Asia recently

Figure 6: Exchange rates



Indonesia’s medium-term economic prospects are positive, and investor confidence is building. With continued strong domestic demand growth offsetting the weakness on the external side, real GDP growth is forecast to be in the range of 6-6.5% a year in the next two years. The forecast expansion in Indonesia’s middle class, rising urbanization and labour force participation, underpin the projection of real GDP growth of 6-7% a year in 2015-17.

Private consumption and gross fixed investment will remain the key drivers of overall economic growth in the medium term. Relatively low unemployment and high wages will ensure private consumption growth remains around 5-6% a year, while low interest rates and the government’s infrastructure spending plans will help to keep investment rising at a fast pace.

Despite concerns over the regulatory environment in the mining sector, foreign investor interest in Indonesia’s economy will remain strong, with foreign firms setting up or expanding their operations to provide goods and services to the large domestic consumer base and also to export via Indonesia’s improved links within the Asia region.

Despite the fairly rosy outlook for economic growth, there are some concerns over the deterioration in Indonesia’s current account position. The current account posted a deficit equivalent to around 2.7% of GDP in 2012, reversing from a surplus of 0.1% in 2011. We expect this trend to continue in the short term, as the goods balance will decline further as commodity driven exports growth slows and as import demand remains strong.

The growth outlook is favourable

Indonesia’s economy will continue to post

impressive rates of growth in the next five

years, keeping investors keen

Figure 7: The outlook for Indonesia’s GDP

Source: Timetric


The prospects for the global economy are improving, but the economic environment remains complex. Although the chances of an extreme event affecting international financial markets – such as a disorderly break-up of the eurozone – have diminished, the risks to global financial stability remain high.

In advanced economies, the scope for monetary loosening is limited and fiscal constraints are poised to remain in place in the years ahead, hindering growth prospects. Meanwhile, growth in the emerging world has decelerated across many of the main economies as a result of diminished international trade and investment flows. This has triggered a downgrade of growth prospects affecting many important economies, particularly China, India and Brazil. However, domestic demand remains resilient, which will allow these economies to continue to drive global growth.

The outlook for the global economy is for a moderate recovery in 2013, with momentum improving from mid-year onwards and paving the way for a broader upturn of global GDP in 2014. Global growth is expected to pick up slightly from 3.2% in 2012 to 3.5% in 2013.

Over the remainder of the forecast period (2014-17), the global economy will strengthen, although the pace of expansion in global economic activity will not return to the annual rates of over 5% seen before the global financial crisis.

The global picture is brighter, but there are risks

Prospects for the global economy have

improved, but the economic environment

remains complex

Figure 8: GDP growth outlook for BRICs

Source: Timetric


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Indonesia’s construction sector has been performing well in recent years driven by strong economic activity and high levels of investment. Indeed, fixed investment has soared over the past decade, with its share of total GDP rising from 19.5% in 2003 to a historic high of 33.2% in 2012.

The construction sector has been a clear beneficiary of this investment activity. It has grown by 7.4% on an annual average basis in real terms over the past 10 years, well above the GDP growth rate of 5.9%. It maintained this rate of growth in 2012, expanding by 7.5%. In line with this trend, the construction sector’s share of total GDP increased from 6.2% in 2003 to 10.4% in 2012.

Despite some challenges, the outlook for construction is favorable. In nominal output value terms, the sector will grow by 15% a year in the next five years, supported by urbanization, rising incomes and the government’s effort to improve the infrastructure base as part of its ambitious multiyear plan — the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI). In order to attract investment for the master plan, which envisages spending of up to IDR4,000 trillion (around USD428 billion) during the 2011-2025 timeframe, the government is taking steps to strengthen public-private partnership (PPP) regulations

Infrastructure construction will be the leading sector in terms of growth, but the other construction sectors, particularly residential and commercial construction, will also see healthy growth given the positive economic outlook and the rapid expansion of the country’s middle class.

Construction will continue on an impressive growth trend

The construction sector has been growing

at a rapid pace in recent years, supported

by rising investment

Figure 9: Construction activity



Indonesia has attracted massive foreign direct investment (FDI) in recent years, with the total rising to USD24.6 billion in 2012. However, the share attracted by the construction sector has been falling, dropping to just USD240 million in 2012 from a recent high of USD618.4million in 2010.

FDI in construction dipped only slightly in 2008, before continuing on an upward trend in the following two years, but the slump in 2011-12 is a concern for the government as it tries to boost investment in infrastructure construction.

Although FDI in the construction sector has disappointed, domestic firms ramped up investment spending in 2012. According to data from the Indonesia Investment Coordinating Board (BKPM), total domestic direct investment in construction soared to IDR4.6 trillion (USD490 million) in 2012. However, this followed two years of weak domestic investment in the construction sector, averaging just IDR666 billion (USD68 million) a year.

The government is trying to kick-start rapid development of the country’s infrastructure, the state of which is currently a major drawback for investors.

The government has already announced its intention to boost infrastructure construction spending, with proposals to spend IDR194 trillion in 2013, up from IDR169 trillion in 2012, to finance the construction of a number of major road, railway and airport projects.

FDI in construction wanes, but the government is investing heavily

FDI in construction has fallen sharply, but

domestic investment has picked up and the

government has ambitious plans

Figure 10: Foreign direct investment in Indonesia [USD Million]

Source: BKPM


The general expansion in the economy, and in the construction sector in particular, in the past few years has been owing in part to relatively easy credit conditions, with Bank Indonesia cutting its benchmark interest rate (the BI rate) to a historic low of 5.75% over the past year.

Given these relatively loose credit conditions, the stock of lending to the construction sector by domestic commercial banks soared by 27.2% in 2012 to IDR96.1 trillion (USD10.3 billion). The stock of lending dropped in early 2013, but the outstanding stock was still more than 20% higher than in the year-earlier period.

Loose credit conditions have also contributed to solid growth in the real estate market. Indonesia’s residential property price index rose by 4.6% on an annual basis in 2012, above its ten year average growth of 3.8%, suggesting strong activities in the housing market.

The increasing working age population, soaring per capita GDP and rapid urbanization are expected to keep the housing market momentum up in the coming years.

Loose credit conditions support loan growth

Lending to the construction sector has

risen sharply, boosted by relatively loose

credit conditions

Figure 11: Bank lending to the construction sector

Source: BKPM


Indonesia’s construction sector is a critical source of employment growth in the country. Around 7 million workers, some 6% of the total labour force, were directly involved in the construction industry in 2012. This was double the number employed a decade or so ago.

However, the rapid growth of the construction sector and the high demand for construction workers has seen labour costs rise on a steep trajectory. The wages and salary index calculated by Statistics Indonesia shows that salaries and wages have increased by 19.3% year-on-year on average in every month since 2009, much above its long term average of 3.9%, reflecting strong activities in the sector.

Wages in general will remain on an upward trend in the coming years. Indeed, there will be a particularly sharp rise in 2013 in line with the government’s plan to allow minimum wages to increase by a maximum of around 40%.

The increase in minimum wages is contentious, with companies complaining of the threat that higher wages pose to competitiveness. Reflecting such pressure, the government is allowing some concessions for labour intensive industries.

Given the large portion of informal sector workers in construction, changes in actual wages for construction workers are lower than increases in minimum wages. However, the sharp upward trend in formal sector wages will still put greater pressure on construction companies’ profit margins.

Construction employment and wages on the rise

Labour costs are set to remain on an

upward trend, not least because of a sharp

jump in minimum wages in 2013

Figure 12: Construction workers and wages [Index, 2010=100]

Source: Statistics Indonesia


According to Timetric’s Construction Macro Risk Model for emerging markets, Indonesia is considered a low risk market in terms of its overall macroeconomic position and the health of its construction industry. Malaysia is the only other country in the Emerging Asia region to be classified as low risk. Malaysia, which is ranked in 4th place in the risk rankings (out of 25 countries in the model), is subject to low bank lending and exchange rate risk, while risks to economic growth in Indonesia are relatively low and the economy has recorded a low degree of volatility.

India, Thailand and the Philippines are moderate risk markets. India’s macroeconomic problems are manifold, with the country suffering relatively slow growth and high inflation in recent quarters, but the outlook is improving and specific risks to the construction sector are limited.

Vietnam is an outlier in the region, with a very high risk rating. The property market slump combined with a sharp tightening of monetary conditions in recent quarters has severely undermined construction activity and greatly damaged investor sentiment.

In other regions, with stable economic growth and a strong construction sector, Chile is regarded as the only country in the rankings that is subject to very low risk. The country scores particularly well in our assessment of risk to bank lending and the risks facing the construction sector and real estate market.

Meanwhile, Egypt and Nigeria, alongside Vietnam, are currently considered to be very high risk markets when assessing their overall macroeconomic situation and construction industries.

Construction “macro risk” is low in Indonesia

Rank Country Risk

1 Chile Very low

2 Mexico Low

3 Czech Republic Low

4 Malaysia Low

5 Poland Low

6 Colombia Low

7 Indonesia Low

8 China Low

9 Russia Low

10 Taiwan Low

11 Peru Moderate

12 Saudi Arabia Moderate

13 India Moderate

14 Turkey Moderate

15 Brazil Moderate

16 Thailand Moderate

17 Romania Moderate

18 Hong Kong Moderate

19 Philippines Moderate

20 South Africa High

21 Argentina High

22 Hungary High

23 Vietnam Very high

24 Egypt Very high

25 Nigeria Very high

Source: Timetric analysis


Despite favorable macroeconomic conditions, the construction sector in Indonesia is set to face some challenges. The government appears determined to push ahead with its plans to invest in improving the country’s infrastructure. However, given long-standing problems in executing budget spending plans, there is a risk that the government will fail to proceed with these infrastructure projects in a timely manner.

There are also persistent worries over Indonesia’s excessive bureaucracy, which leads to delays in implementation, eroding the viability of construction projects.

In the World Bank’s Doing Business 2013 report, Indonesia ranked in a lowly 128th place out of 185 countries, ahead of the Philippines (138th) but below India (132nd), Vietnam (99th) and far behind Thailand (18th) and Malaysia (12th).

In terms of dealing with construction permits, Indonesia ranks in 75th place, with the time taken to complete the process being 158 days on average. With respect to enforcing contracts it is ranked in 144th place.

Corruption is also another factor diminishing the quality of Indonesia’s business operating environment and creating inefficiencies in the construction sector. According to Transparency International’s latest Corruption Perceptions Index, Indonesia ranked in 118th place out of 176 countries.

Operating risks could still derail growth

Despite generally favourable economic

conditions, operational risks are high and

could constrain construction growth

Figure 13: Doing Business rankings, 2013

Country Overall Doing

Business

Dealing with construction

permits

Indonesia 128 75

Malaysia 12 96

Philippines 138 100

Thailand 18 16

Vietnam 99 28

India 132 182

Source: World Bank, Doing Business 2013


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




The robust performance of the construction industry in recent years has created great demand for building materials in Indonesia, and has supported the expansion in Indonesia’s building materials industries. According to the Indonesian Cement Association (ASI), cement consumption reached around 55 million tonnes in 2012, up from 48 million tonnes in the previous year.

With domestic demand on the rise, there has been a shift in the country’s international cement trade, with the country’s imports on a rising trend and exports falling sharply over the past two years. In 2012 Indonesia’s cement exports plummeted by 65%, while its imports more than doubled, the result being a trade deficit in cement products of USD190 million.

Domestic demand will continue to rise over the next few years. The Industry Ministry is expecting cement sales to reach 62 million tonnes in 2013, largely driven by increased infrastructure development in the economy. Meanwhile, national cement production in 2013 is estimated to increase by 7.0% to 65 million tonnes.

Materials are in demand

Domestic cement demand remains strong,

and resulted in Indonesia becoming a clear

net importer in 2012

Figure 14: Cement trade [USD Million]



Reflecting the strength of demand for construction materials, there has been major investment in the sector in recent years, from both domestic and foreign companies.

According to data from BKPM, foreign investment in the non-metallic mineral sector (predominantly cement and lime products), jumped from just over USD28.4 million in 2010 to USD137.1 million in 2011 and USD145.8 million 2012.

Meanwhile, domestic investment in the industry increased to around IDR10.7 trillion (USD1.1 billion) last year from IDR2.3 trillion in 2010 to IDR7.4 trillion in 2011.

There are currently three major players in the cement manufacturing sector, led by with state-owned PT Semen Indonesia, the largest cement group in the country (including PT Semen Padang and PR Semen Tonasa). However, a number of new foreign companies are moving ahead with plans to set up operations in the country. These include a number of Chinese companies, namely Anhui Conch and Chinese State Development and Investment Cooperation, as well as Thailand's Siam Cement.

Even excluding this new investment, the Industry Ministry expects installed capacity for the cement industry to go up from 60.6 million tonnes in 2012 to about 78.5 million tonnes by 2016 in order to meet the surging demand for cement.

Investment and capacity is rising

New foreign players are set to boost

cement production and capacity over the

coming years

Figure 15: Investment in non-metallic mineral sector

Source: BKPM


Although supply is expanding, the strong demand for construction materials is pushing up prices in Indonesia. Based on the wholesale price index, construction materials in general rose by 4.5% on an annual average basis in 2012, accelerating from 3.8% in 2011 and 2.4% in 2010. Prices for materials used in public works on roads, bridges and ports were up by 5%, and for materials in residential and non-residential buildings by 4.2%.

With the government planning to move ahead with massive infrastructure construction projects, materials demand will strengthen, and with it prices for key materials.

The import bill for key products could also rise sharply, even though local producers will shift away from exporting in order to focus on meeting domestic demand, as has already been the case with cement. Imports of base metals have been on a rising trend in recent years, increasing from USD9.6 billion in 2009 to USD20.1 billion in 2012.

The government has made assurance that it will contain rises in the prices of key construction materials in the face of rising demand and upward pressure on fuel prices. However, this could prove challenging, as it is not only higher fuel costs that could push up materials prices, but also rising labour costs given the government’s plans to push up minimum wages.

Materials prices edge upwards

Strong demand is pushing up prices for key

materials, but the government will try to

contain future rises

Figure 16: Construction materials prices [Index, 2005=100]



Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Indonesia is an important global mining hub, producing and exporting key commodities, including coal, copper, tin, gold and nickel. The country is the world’s second largest producer of tin, nickel and ignite, the fourth largest producer of copper, and a leading exporter of coal. Reflecting this, the mining sector (excluding oil and gas) remains a major driving force in the economy, accounting for around 18% of total GDP in 2012.

The sector has expanded rapidly in nominal terms over the past five years or so, supported by the boom in global commodities prices. There has also been strong growth in real terms. Growth averaged 5% in 2006-07 before shrinking by 1% in 2008 amid the downturn in the global economy. However, it recovered quickly, growing by 10% in 2009. Since then, there has been some volatility on a quarterly basis, but growth averaged 5.5% a year in 2010-12.

Quarrying, which accounts for around 5% of total GDP, has also continued its robust growth. In real terms, the sector expanded by 7.7% in 2012, up from 7.4% in 2011.

The mining sector is an important source of export revenue, typically contributing around a third of total export earnings. However, a slowdown in global demand and a drop in prices have affected revenues in recent quarters. In 2012, total mining export revenue fell to USD31.2 billion from USD34.2 billion in 2011, a drop of nearly 9%.

Mining boom stalls

The mining sector has expanded sharply in

recent years, but the pace of growth has

slowed amid a drop in commodities prices

Figure 17: The mining sector (excluding oil and gas)



The decline in coal exports in 2012 was relatively shallow, with total export revenue for the coal sector dropping by 2.8% to USD26.2 billion, this despite the fact that international coal prices dropped sharply during the year. Copper ore exports, meanwhile, plummeted by 47% to USD24.8 billion last year.

Although export values declined, coal output has continued on an upward trend. According to estimates from the Ministry of Energy and Mineral Resources (ESDM) coal production rose to 386 million tonnes in 2012, up from 353 million tonnes in 2011. The drop in prices last year was a disincentive for miners, and some reportedly sold selling below cost.

The ministry is confident that output will continue to rise in 2013, to 391 million tonnes. However, this could prove to be optimistic. Global demand is set to pick up, which should see prices recover in the next few years, but not to the recent 2011 highs.

Moreover, with a clear government objective of ensuring sufficient domestic supply of coal to meet the country’s expanding energy needs, the outlook for coal exports remains unclear. (Official data also shows that 82 million tonnes were supplied to meet domestic demand and 304 million tonnes were exported. )

Although a formal policy for coal has yet to be announced, some form of restriction on coal exports appears inevitable, as PLN, the main energy supplier in the county, seeks to ramp up electricity generation over the coming decade.

.

.

The coal sector faces challenges

After a number of years of rising mining

export revenue, there was a drop in 2012

as prices fell

Figure 18: Mining export revenue [USD Million]



Indonesia’s mining industry has attracted massive foreign direct investment (FDI) recently. In the whole of 2012 it reached USD4.2 billion, pulling the total for FDI in mining in the past three years to USD10 billion. Reflecting the importance of the sector to the overall economy, it accounted for 17% of total FDI in 2012. Domestic investment has also soared, hitting IDR16.5 trillion (around USD1.77 billion) in 2012, up from IDR6.9 billion in 2011.

However, there is great uncertainty regarding the future of Indonesia’s mining regulatory environment, which could curtail the future expansion in FDI in the mining sector. The government appears determined to force miners to start processing ores domestically rather than exporting them for processing abroad. A 20% export duty has already been applied to 14 mineral ores, including copper and gold.

The government has also been imposing restrictions on exports of unprocessed mining commodities (except coal) ahead of a full ban that is to be put in place in 2014. These measures have not been welcomed by export-oriented miners, and it is uncertain whether they will embark on a programme of constructing smelters and processing plants or instead divest.

Foreign investors are also being forced to sell down their stakes in mines in the country in a phase process that ends with the firms holding a maximum stake of 49% by the 10th year of productive operations. These reforms to restrict foreign ownership of mines and to prevent miners from exporting mineral ores have a clear nationalistic underpinning, and could yet prevent the Indonesian mining sector from reaching its full potential.

Foreign miners weary of new regulations

Investment in mining remains strong, but

new nationalistic regulatory reforms are a

major concern for foreign miners

Figure 19: Investment in the mining sector



Wages in the mining sector rose in the years ahead of the global financial crisis as the sharp increase in global commodities boosted revenues in the sector. Wages dropped back 2008-09, but returned to 2008 highs in 2010-11.

Weakness in the sector in 2012 saw wages ease again to around IDR3.6 million (USD385) a month in the third quarter of the year, down from IDR4.1 million in the corresponding period of the previous year. On an annual basis, wages also fell by an average of around 10% in the first three quarters of 2012.

The availability of low cost labour to support the extractive industries has been a key advantage for Indonesia, but with minimum wages being pushed up in 2013, by up to 40%, and with a general lack of highly qualified personnel, there are possible challenges ahead for major mining firms operating in the country.

In line with the expansion in the sector in recent years, mining employment rose steadily over the past decade. In early 2012 the sector employed around 1.6 million, a 9.3% annual rise, and up from around 1 million in 2006.

However, reflecting the general downward trend in the sector, employment is estimated to have eased throughout the latter part of last year, a trend that is set to continue given the upwards pressure on wages.

Mining wages have eased

Mining wages have dropped back in recent

quarters, amid signs of profitability worries

for miners

Figure 20: Mining employment and wages



Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




The heavy equipment industry in Indonesia is highly competitive and concentrated, with four local players backed by global heavyweights accounting for around 96% of total production volume.

PT Komatsu Indonesia, a joint venture between Japan’s Komatsu and PT United Tractors, is the largest producer, and offers the largest range of products.

It is followed by PT Caterpillar Indonesia, a joint venture between the US’s Caterpillar Inc and PT Tiara Marga Trakindo; PT Hitachi Construction Machinery Indonesia, a subsidiary of Japan’s Hitachi Construction Machinery; and PT Daya Kobelco Construction Machinery Indonesia, a subsidiary of Japan’s Kobelco Construction Machinery.

Adding to the competitive market, PT Sumitomo SHI Construction Machinery Indonesia, a subsidiary of Japan’s Sumitomo (S.H.I.) Construction Machinery, recently established a presence in Indonesia, commencing operations in late 2011. The company’s factory in Karawang, Jawa Barat, has the capacity to produce 1,000 hydraulic excavators annually.

Data from United Tractors shows that Komatsu is the leading player in terms of unit sales. In 2012 it accounted for 43% of total domestic sales of over 14,400 units, followed by Hitachi (21%), Caterpillar (19%), and Kobelco (13%), with other smaller players making up the remaining 4% of the market.

Chinese manufacturers do not have much of a foothold in Indonesia’s market, with quality and the reputation of distributors to meet the requirements for parts and repairs being a factor that has supported demand for established global brands.

Foreign heavyweights dominate equipment market

The supply-side is highly concentrated, with

leading players backed by global

heavyweights

Figure 21: Sales Market Shares in 2012

Source: United Tractors


According to the Heavy Equipment Manufacturer Association of Indonesia (HINABI), production of construction and mining equipment from its members reached an all time high of 7,947 units in 2012, up from 7,353 in 2011.

Around 80% of this production comprised hydraulic excavators, with bulldozers accounting for most of the remainder. (HINABI’s data also includes output of motor graders, wheel loaders and dump trucks.) Production volume slumped in 2009 amid the global financial crisis, dropping to just 1,814 units in the year as whole, but it rebounded quickly in 2010 to reach nearly 4,700 units.

The mining sector accounts for more than half of total demand for heavy equipment in Indonesia, and in particular for large units, such as giant excavators. Construction, agribusiness and forestry account for the remainder, mainly small and medium sized units, up to 20 tonnes.

Although overall production increased in 2012, the leading heavy equipment companies appear fairly gloomy about the outlook for sales in the year ahead, owing mainly to the limited growth prospects for the mining sector given the relative weakness in global mining commodities prices. Indeed, HINABI has projected that domestic production volumes will drop back to around 7,000 units in 2013, reflecting weak global economic conditions and the knock-on impact on demand for mining commodities.

However, the leading domestic producers will continue to focus on supplying the leading construction contractors that are securing new business under the government’s infrastructure development programmes. They will also be focused on maintaining a strong spare parts and services business.

Mining sector is key source of demand

Production has rebounded strongly

following 2009 slump, but demand could be

weak in short term

Figure 22: HINABI members’ equipment production [units]

Source: Heavy Equipment Manufacturer Association of Indonesia (HINABI)


PT Komatsu Indonesia Tbk (Komatsu Indonesia) is a joint venture between Japan’s Komatsu and PT United Tractors that was established in 1982. At its 20.3 ha manufacturing plant in the Cakung Cilincing industrial area, the company produces hydraulic excavators, bulldozers and off-highway dump trucks. Fabricated components of the company include boom, track frame, crawler frame, center frame and crawler. In 2009 it also set up operations at the Cibitung Industrial Estate, where it runs a “big size fabrication plant”.

According to United Tractors, sales of Komatsu machinery in Indonesia dropped to IDR13,859 billion (USD1.48 billion) in 2012 from IDR18,693 billion in 2011. Reflecting this trend, Komatsu’s share of the market dropped from 49% in 2011 to 43% in 2012. In terms of volume sales, Komatsu sold 6,202 units in 2012, down from 8,467 in 2011. Of its total sales, mining accounted for 54%, agribusinesses 24%, construction 16%, and forestry 6%.

Komatsu (the parent company) has been cutting its profit projections mainly because of the expectation that demand for mining equipment in Indonesia will be negatively affected by the recent drop in coal prices.

Meanwhile, PT United Tractors, the distributor of Komatsu equipment, recorded total revenue growth of just 1.6% in 2012, with revenue from construction machinery dropping to IDR22,158 billion, as fall of 19%. Construction machinery accounted for around 40% of United Tractor’s total revenue of IDR55,954 billion in 2012.

Supplier profiles – PT Komatsu Indonesia / United Tractors

Source: Indonesia Stock Exchange

[IDR Billion] 2008 2009 2010 2011 2012

Total Revenue 27,903 29,242 37,324 55,053 55,954

Expenses 22,404 22,571 30,528 44,859 45,433

Gross Profit 5,499 6,671 6,795 10,194 10,521

Operating Expenses

1,340 1,502 1,633 2,578 3,074

Operating Profit

4,159 5,169 5,163 7,615 -


Figure 23: United Tractors stock prices [IDR]


PT Hitachi Construction Machinery Indonesia (PHCMI) is a subsidiary of Japan’s Hitachi Construction Machinery. The company offers engineering products, excavators, construction machinery and heavy equipment components. The company’s heavy equipment components include dump truck, side frame, crane frame and main frame. It caters to construction, chemical, oil and gas, and heavy industrial sectors.

The company’s manufacturing and production facilities are located in Cibitung, where it has a total land area of 31 hectares. Hitachi is increasing annual capacity at its plant in Cibitung, to 5,500 units by March 2014, from 3,300, and 247 ultra-large excavators units.

In its latest financial report, Hitachi highlighted concerns about the slowdown in mining equipment demand in Indonesia on the back of fall in coal and palm oil prices. However, it also noted that infrastructure investment-related demand in urban areas had become more apparent.

Hitachi operates with a sole distributor in Indonesia, PT Hexindo Adiperkasa, which classifies its operations into two geographic divisions: Java Island and Outside Java Island. The Java Island and Outside Java Island divisions accounted 8% and 92% of the company’s total revenues, respectively in 2012. In January-September 2012 the company reported revenue of IDR3,475 billion (USD372 million) compared with IDR4,160 billion in the whole of 2011.

Key suppliers – PT Hitachi Construction Machinery Indonesia


[IDR Billion] 2008 2009 2010 2011 Jan-Sep

2012

Total Revenue 2,793 2,158 3,226 4,160 3,475

Expenses 2,124 1,679 2,643 3,281 2,757

Gross Profit 669 479 582 879 718

Operating Expenses

266 200 237 305 223

Operating Profit

403 279 346 574 495


Figure 24: Hexindo Adiperkasa stock prices [IDR]


PT Caterpillar Indonesia (Caterpillar Indonesia) is a joint venture between Caterpillar Inc., USA (80%) and PT Tiara Marga Trakindo (20%) and is headquartered in Cileungsi, Bogor. Its portfolio of products includes excavators, bulldozers, motor graders, wheel loaders, trucks, tractors, scrapers, road reclaimer, pipelayers, wheel dozers, material handlers and forest machines. CAT’s 20-ton class of excavators that are made in Indonesia are primarily sold into the mining, forestry, construction and agricultural markets across Indonesia.

Its factory at Cileungsi, which was opened in 1982, is focused on producing excavators and skidders. The company has approved plans to triple excavator production at the location, from its initial capacity of 1,290 units per year.

Caterpillar has also invested USD150 million in a new mining truck facility in Batam, the firm’s second manufacturing operation, and at that plant it will produce a range of mining truck chassis and bodies to be shipped to mining customers throughout the Asia-Pacific region.

PT Trakindo is the authorized dealer in Indonesia for Caterpillar products, and it has more than 65 branches throughout the country.

Key suppliers - PT Caterpillar Indonesia / Trakindo


PT. Daya Kobelco Construction Machinery Indonesia (Kobelco Indonesia) offers construction equipment in Indonesia. The company’s portfolio of products includes hydraulic excavators, crawler cranes, backhoe loaders, skid steer loaders, wheel loaders and harvesters.

Kobelco Indonesia offers spare parts and component support, parts exchange program, field services, machine inspection program and preventive maintenance contract to its customers. Its after-sales services include commissioning, periodic service and customer training.

The company is also involved in selling used construction equipment. It operates a network of 17 branch offices and three service stations across Indonesia. Kobelco Indonesia operates as a subsidiary of Kobelco Construction Machinery and is headquartered in Jakarta.

Key suppliers - PT Daya Kobelco Construction Machinery Indonesia


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




There has been a sharp rise in the number of construction contracting companies operating in Indonesia in recent years. According to the National Construction Services Development Board, in 2011 there was a total of 182,800 contractors, up from around 112,000 in 2008. Reflecting this expansion, competition is intense, and margins tend to be relatively low.

However, the vast majority of these companies are classified as being small-sized firms. According to the Indonesian Builders Association (Gapensi), the medium and large firms combined account for around 85% of total construction output value, with the thousands of small contractors competing for the remaining 15%.

The number of contractors classified as large rose from 695 to 1,742 between 2008 and 2011, while the number of medium-sized firms increased from around 10,000 to 21,000, and small-sized firms expanded in number from just over 100,000 to 160,000.

The number of large foreign contractors has also risen, from 79 in 2008 to around 130 currently. The largest of these foreign operators are Kajima (Japan), China Communications Construction, Daewoo Engineering (Korea), and Leighton Holdings (Australia).

Despite the fragmented nature of the construction contractors sector, there are a number of leading domestic players. The largest firms are fully or partly state-owned, and these include Adhi Karya (ADHI) and Wijaya Krya (WIKA), with markets shares of around 7%. The state players are well placed to capture a large share of the expansion in Indonesia’s infrastructure construction activity. This in part reflects the fact that these companies have a solid presence across Indonesia. However, around 60% of construction work (by value) currently takes place in the Java region.

Contractors’ market is highly fragmented

The main state-owned contractors are well-

placed to gain a large share of

infrastructure construction

Figure 25: Construction value by key regions (IDR Billion)



The mining sector in Indonesia is dominated by around 10 companies, including PR Adaro, Bumi Resources (through its holding of PT Kaltim Prima Coal and PT Arutmin), PT Berau, and a state coal miner, PT Tambang Batubara Bukit Asma.

Mining firms have been creating much of the demand for heavy equipment in recent years amid the boom in mining, particularly in the coal sector. However, a slowdown in mining output growth in 2012 has raised concerns over future demand for equipment, and this has led to the major suppliers revising down their sales projections. This, in turn, has resulted in heavy equipment manufacturers and distributors to revise down their sales forecasts.

Total coal mining output reached 386 million tonnes in 2012, up from just 240 million tonnes in 2008. However, official forecasts are for sluggish growth in 2013. The Ministry of Energy and Mineral Resources (ESDM) predicts that production will rise to 391 million tonnes, but the Indonesian Coal Mining Association has a more pessimistic view, expecting output to fall back to 375 million tonnes.

Much depends on what happens to global coal prices. On an annual average basis, prices dropped to USD103 per tonne in 2012 from USD130 per tonne in 2012, but during 2012 prices fell from a high of USD125 per tonne in February to around USD88 in October. Prices recovered to over USD100 per tonne in early 2013, but the outlook is uncertain.

Mining is dominated by large groups

Coal miners have been driving demand for

heavy equipment, but the fall in coal prices

has undermined demand

Figure 26: Coal output and prices

Source: World Bank, Ministry of Energy and Mineral Resources


According to the Indonesia Cement Association (ASI), there are nine major cement producers in the country, with a total capacity of around 60.6 million tonnes, but the market is dominated by three companies with a combined market share of around 85%.

The state-owned PT Semen Indonesia is the largest cement group in the country (including PT Semen Padang and PR Semen Tonasa), producing 22.6 million tonnes in 2012. It is followed by PT Indocement Tunggal Prakarsa, in which Germany’s HeidelbergCement Group is a leading shareholder, and PT Holcim Indonesia, part of the Holcim Group.

In terms of capacity, PT Semen has a share of 40%, ahead of Indocement (35%) and Holcim (15%). According to the industry ministry, all cement producers will expand capacity over the next few years, which will drive up demand for manufacturing equipment. The ministry foresees total capacity to be nearly 30% bigger in 2016 compared with the total in 2012. It projects PR Semen Indonesia’s capacity to rise from around 24 million tonnes in 2012 to 32 million tonnes in 2016.

PT Holcim Indonesia is building a second cement plant on the northern coast of Java, Tuban 2, which will come into operation in 2015. Both the initial plant, Tuban 1, and the newly planned project will have a capacity of 1.7 million tonnes a year. Indocement also has a new plant, with a capacity of 4.4 million tonnes a year, ready to come into operation in late 2015, and is considering two other plants with a total capacity of 5 million tonnes a year.

Other groups are expanding production capacity in Indonesia, including Thailand’s Siam Cement, which has a plant with capacity of 1.8 million tonnes set to commence production in 2015.

Cement firms are expanding

Cement manufacturers are expanding

capacity to meet growing demand

Figure 27: Cement production capacity [‘000 tonnes]

Source: Ministry of Industry


PT Adhi Karya (Persero) Tbk (ADHI) is a 51% state-owned construction company focused on engineering, procurement, construction, property development and infrastructure-related investment businesses. The company undertakes a wide range of construction projects, which include roads and bridges; irrigation infrastructure; transportation infrastructure such as airports, docks and ports; apartments, hotels and condominiums; and facility buildings such as hospitals, educational facilities and sport facilities.

The company is also involved in property and real estate development through which it develops luxury residential buildings and home stores. ADHI, along with its subsidiaries and other affiliates, operates in Indonesia, Oman and Singapore. The company is headquartered in Jakarta.

The latest full-year financial submissions show that the company reported revenues of IDR6,695 billion (USD720 million) in 2011, growing by 18% year on year. However, revenue remained below the total of IDR7,715 billion in 2009. In January-September last year, revenue appeared fairly weak, standing at IDR3,565 billion. Operating profit was also sluggish in the first three quarters of 2012; it amounted to IDR241 billion compared with IDR413 billion in the whole of 2011.

Key contractors – Adhi Karya

Figure 28: Adhi Karya stock prices [IDR]


[IDR Million] 2008 2009 2010 2011 Jan-Sep

2012

Total Revenue 6,639,942 7,714,614 5,674,980 6,695,112 3,565,162

Expenses 6,095,669 7,059,135 4,964,348 5,960,704 3,179,120

Gross Profit 572,521 751,880 769,110 799,042 434,032

Operating Expenses

204,613 215,061 218,276 385,498 192,980

Operating Profit

367,908 536,819 550,834 413,544 241,052



PT Wijaya Karya (Persero) Tbk (WIKA) is a 66% state-owned construction contractor. The company provides engineering procurement and construction (EPC) services to civil, infrastructure, building, industrial and energy sectors. In civil construction sector, the company constructs roads, bridges, irrigations and transportation infrastructures.

The company also constructs hotels, residential complexes, hospitals, airports, educational facilities, sport centers, and shopping malls. In addition, WIKA builds oil and gas plants, steel fabrication factories, power plants, and other industrial facilities. It is also involved in manufacturing and trading of construction materials. WIKA has operations in Indonesia, Algeria, Iraq, Myanmar, Brunei and Comoros, and is headquartered in Jakarta.

The latest full-year financial submissions show that the company reported revenues of IDR7,742 billion (USD830 million) in 2011, a strong performance, up by 28.5% year on year. The outturn in January-September last year was also fairly strong, standing at IDR6,370 billion. This pushed operating profit to IDR514 billion in the first three quarters of 2012; it amounted to IDR653.7 billion in the whole of 2011 and IDR478 billion in 2010.

Key contractors –Wijaya Karya

Figure 29: Wijaya Karya stock prices [IDR]



2012

Total Revenue 6,559,077 6,590,857 6,022,922 7,741,827 6,370,316

Expenses 6,113,047 5,967,732 5,390,012 6,978,414 5,779,175

Gross Profit 442,932 645,733 673,068 864,935 699,669

Operating Expenses

155,001 160,782 195,457 211,194 185,597

Operating Profit

287,930 484,951 477,611 653,741 514,072



PT Pembangunan Perumahan (Persero) Tbk (PT PP) is a 51% state-owned construction and engineering business in Indonesia. The company designs and constructs roads and bridges, hydro electric projects, dams and irrigation projects and coal fired power plants, hotels, offices, commercial establishments, hospitals, shopping malls, universities, and housing apartments. In addition, PT PP manages, sells, and rents office buildings and hospitals. Key projects of the company include Bali Beach Hotel, Musi Hydroelectric Power Plant, Tunnel of Saguling Hydroelectric Power Plant, Barelang Cable Stayed Bridge, and Kapuas Bridge Pontianak. PT PP is headquartered in Jakarta.

The latest full-year financial submissions show that the company reported revenues of IDR6,232 billion (USD670 million) in 2011, a strong performance, up by 41.6% year on year. The outturn in January-September last year was less impressive, standing at IDR3,943 billion. Operating profit in the first three quarters of 2012 slipped to IDR356 billion compared with IDR655 billion in the whole of 2011, but it was close to the full-year figure for 2010 of IDR392 billion.

Key contractors – Pembangunan Perumahan

Figure 30: Pembangunan Perumahan stock prices [IDR]


[IDR Million] 2009 2010 2011 Jan-Sep

2012

Total Revenues 4,203,313 4,401,229 6,231,898 3,942,528

Expenses 3,860,773 3,983,232 5,526,136 3,562,643

Gross Profit 466,649 514,624 785,922 462,193

Operating Expenses

98,750 122,430 130,981 105,927

Operating Profit

367,899 392,194 654,940 356,266



PT Total Bangun Persada Tbk (Total Bangun) is a private construction and property development company. It is involved in the construction of commercial and high rise buildings and industrial construction. The company’s key commercial and high rise building projects include offices, banks, apartments, shopping centers, hotels, club houses, hospitals, schools and universities, and religious buildings. In addition, the company constructs industrial facilities such as factories, warehouses and storage facilities, through its subsidiary PT Total Persada Industri. The company is also involved in property development activities through other subsidiaries. Other operations of the company include leasing of office space and construction equipment. Total Bangun mainly operates in Java-Bali, Kalimantan, Sulawesi and Sumatera, and is headquartered in Jakarta.

The latest full-year financial submissions show that the company reported revenues of IDR1,569 billion (USD170 million) in 2011, a weak performance with growth of just 1.8% compared with 2010 and down from IDR1,731 billion in 2009. Based on the outturn in January-September last year the company’s performance was improving, with revenue of IDR 1,369 billion. Indeed, in terms of operating profits, the company has been making solid gains, posting IDR258 billion in the first three quarters of 2012 up from IDR172 billion in the whole of 2011.

Key contractors – Total Bangun Persada

Figure 31: Total Bangun Persada stock prices [IDR]



2012

Total Revenues 1,893,461 1,730,573 1,541,101 1,569,453 1,369,355

Expenses 1,792,118 1,564,623 1,345,290 1,325,209 1,112,498

Gross Profit 101,343 170,454 196,161 252,987 257,965

Operating Expenses

59,352 78,380 94,897 80,751 -

Operating Profit

59,057 92,074 101,264 172,236 257,965



PT Adaro Indonesia (Adaro Indonesia) is involved in the mining and exploration of coal deposits in Indonesia. The company operates as a subsidiary of PT Adaro Energy Tbk, which is headquartered in Jakarta. It operates the largest single-site coal mine in the Southern hemisphere .

It transports coal directly to coastal offshore anchorage locations and consumer receiving ports for trans-shipment to coal terminal facilities and bulk carriers. In 2012, Adaro Indonesia produced 47.4 million tonnes of coal, its second highest annual output level.

The latest full-year financial submissions show that Adaro Energy reported revenues of IDR36,158 billion (USD3.88 billion) in 2011, a strong performance, up by 45.4% year on year. The outturn in January-September last year was little improved, with revenue standing at IDR26,413 billion. Operating profit in the first three quarters of 2012 slipped to IDR7,008 billion compared with IDR11,639 billion in the whole of 2011, but it was above the full-year figure for 2010 of IDR6,774 billion.

PT Adaro Energy views 2013 as a year of consolidation, when it intends to focus on improving its business processes and reduce costs by improving collaboration with its contractors.

Key miners – Adaro Indonesia

Figure 32: Adaro Energy stock prices [IDR]



2012

Total Revenue 18,092,502 26,938,020 24,689,333 36,157,789 26,413,348

Expenses 13,149,270 15,900,123 16,957,291 23,205,121 18,141,560

Gross Profit 4,943,232 11,037,897 7,732,042 12,952,668 8,271,788

Operating Expenses

731,374 1,109,450 957,764 1,313,246 1,263,823

Operating Profit

4,211,858 9,928,447 6,774,278 11,639,422 7,007,965



PT Bumi Resources Tbk (Bumi Resources) is involved in exploration, exploitation and mining of coal, other minerals, and oil and gas, in Indonesia and select international markets. The company also sells and exports thermal coal deposits. In addition, it holds mining concession rights for zinc, lead, molybdenum, copper, gold and iron ore reserves.

Arutmin produced 22.9 million tonnes of coal in 2011, up from 20.4 million tonnes in 2010, while Kaltmin Prima’s output edged up to 41.0 million tonnes from 40.0 million tonnes. Bumi Resources has operations in China, India, Japan, Indonesia, Taiwan, Yemen, Mauritania, Malaysia, Hong Kong, Philippines, Thailand, Korea and Chile, and is headquartered in Jakarta.

The latest full-year financial submissions show that the company reported revenues of IDR36,282 billion (USD3.89 billion) in 2011, a disappointing performance, down by 7.5% year on year. Revenue in January-September last year was little improved, standing at IDR26,544 billion, but expenses were up, such that operating profit in the first three quarters of 2012 slipped to IDR2,995 billion compared with IDR10,195 billion in the whole of 2011.

Key miners – Bumi Resources

Figure 33: Bumi Resources stock prices [IDR]



2012

Total Revenue 36,993,404 30,367,414 39,233,150 36,281,598 26,544,269

Expenses 19,332,929 19,956,262 24,638,906 21,825,408 19,349,917

Gross Profit 17,660,475 10,411,152 14,594,243 14,456,190 7,194,352

Operating Expenses

5,530,991 4,390,562 4,729,970 4,261,406 4,198,881

Operating Profit

12,129,484 6,020,590 9,864,273 10,194,784 2,995,471



PT Semen Indonesia, formerly known as PT Semen Gresik (Persero) Tbk, is a leading a manufacturer and distributor of construction materials in Indonesia. The company offers products, such as ordinary portland cement, portland pozzoland cement, portland composite cement, super masonary cement, oil well cement and special blended cement. It is also involved in cement packaging and distribution, limestone and clay mining.

The company, which produced 22.6 million tonnes in 2012, has its main production facilities at Gresik and Tuban in East Java, Indarung in West Sumatera and Pangkep in South Sulawesi. It operates through its subsidiaries which include PT Semen Padang, PT Semen Tonasa, PT Kawasan Industri Gresik, PT Swadaya Graha and PT United Tracktors Semen Gresik. The company is headquartered in Gresik, East Java.

The latest full-year financial submissions show that the company reported revenue of IDR19,598 billion (USD2.1 billion) in 2012, an annual increase of 19.7% compared with 2011. With expenses edging up from IDR8,892 billion in 2011 to IDR10,300 billion 2012, the company posted an operating profit of IDR6,182 billion last year.

Key materials manufacturers – Semen Indonesia

Figure 34: Semen Indonesia stock prices [IDR]



2012

Total Revenue 12,209,846 14,387,850 14,344,189 16,378,794 19,598,248

Expenses 6,855,225 7,613,709 7,534,079 8,891,868 10,300,667

Gross Profit 5,354,621 6,774,141 6,810,110 7,486,926 9,297,581

Operating Expenses

1,967,435 2,431,578 2,321,085 2,594,794 3,116,058

Operating Profit

3,387,186 4,342,563 4,489,025 4,892,131 6,181,524



PT Indocement Tunggal Prakarsa Tbk (Indocement) is a cement manufacturing company, based in Indonesia. The company offers products such as ordinary Portland cement (OPC), Portland composite cement (PCC), oil well cement (OWC), white cement (WC) and white mortar TR30. It conducts its manufacturing operations through its plants located across Indonesia, nine of which are in Citeureup (Bogor, West Java), two in Palimanan (Cirebon, West Java) and one in Tarjun (Kotabaru, South Kalimantan).

The company also has wholly owned subsidiaries, such as Indocement (Cayman Islands) Limited (ICI), PT Dian Abadi Perkasa, PT Gunung Tua Mandiri GTM, PT Indomix Perkasa, PT Lentera Abadi Sejahtera, PT Mandiri Sejahtera Sentra, PT Mineral Industri Sukabumi and PT Pionirbeton Industri. Indocement is headquartered in Jakarta.

The company’s output rose to 15.4 million tonnes in 2011 up from 12.9 million tonnes in 2010, driven by an increase in kiln utilization rates.

The latest full-year financial submissions show that the company reported revenue of IDR13,888 billion (USD1.49 billion) in 2011, an annual increase of 24.7%. In the first nine months of 2012, revenue had already reached IDR12,371 billion. This enabled the company to record an operating profit of IDR4,148 billion in January-September 2012, close to the full-year figure reported in 2011.

Key materials manufacturers – Indocement Tunggal Prakarsa

Figure 35: Indocement Tunggal Prakarsa stock prices [IDR]



2012

Total Revenue 9,780,498 10,576,456 11,137,805 13,887,892 12,370,676

Expenses 5,755,935 5,468,018 5,597,043 7,473,669 6,542,392

Gross Profit 4,024,564 5,108,439 5,540,762 6,414,223 5,828,284

Operating Expenses

1,564,695 1,415,133 1,520,732 1,996,200 1,679,854

Operating Profit

2,459,869 3,693,305 4,020,030 4,418,023 4,148,430



Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Although there was a drop in the volume of key mining equipment sales in Indonesia in 2012, demand for heavy equipment in general has been on an upward trend in recent years. Sales plummeted in 2009 amid the global financial crisis, but the boom in mining and the expansion in building construction and infrastructure has contributed to strong demand for heavy equipment in the country since then.

Timetric estimates, based on official production data and other industry sources, show that the total value of equipment sales in Indonesia reached USD4.2 billion in 2012. This market data includes building construction equipment, earthmoving and tunnelling equipment, road building equipment, construction materials manufacturing equipment, and mining equipment. The compound annual growth rate (CAGR) for the whole market is estimated at just over 10% in 2008-12, with sales rebounding quickly from the slump in 2009.

In the next five years, sales growth will continue to expand at an annual average rate around 10%. The outlook for the overall market will be heavily dependent on the government’s success in driving through its ambitious infrastructure development plans. It will also depend to a great extent on the mining sector’s performance.

The key assumptions underpinning the forecast include a healthy rate of overall growth in Indonesia’s domestic economy; continued expansion in construction investment, driven by the government’s major infrastructure development projects and investment in other construction segments supported by the rising population and incomes; and a pick up in the global economy that will see commodity prices improve, contributing to further expansion in Indonesia’s mining sector.

Market size - Overview

Figure 36: Total market and import values [USD Million]

Source: Timetric Analysis

The market will grow at around 10% a year

over the next five years, with imports

continuing to account for a large share


Market size - Overview

Figure 37: Equipment market value [USD Million]


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Building construction equipment – Market value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 142.61 88.86 183.19 224.12 240.71 272.49 298.69 336.40 376.09 424.11

Cranes & Lifting Equipment 128.11 80.52 170.33 206.05 221.95 251.88 276.02 311.20 347.95 392.46

Tower Cranes 14.33 7.17 11.31 11.77 12.80 13.27 14.32 15.18 16.45 17.71

Mobile Cranes 73.76 42.68 105.67 145.40 152.45 185.14 202.39 236.17 266.67 307.01

Lifts & Skip Hoists 40.01 30.67 53.35 48.88 56.70 53.47 59.30 59.85 64.83 67.73

Mobile/Site-Based Concrete Equipment

14.50 8.34 12.86 18.07 18.76 20.61 22.68 25.19 28.14 31.65

Concrete Mixer Lorries 4.71 2.08 3.38 4.49 4.65 5.12 5.63 6.26 7.00 7.90

Crushers/Breakers 3.68 2.37 3.72 5.18 5.34 5.89 6.49 7.23 8.09 9.13

Mixers 4.06 2.38 3.85 5.65 5.90 6.48 7.15 7.96 8.91 10.03

Concrete Pumps 2.06 1.52 1.91 2.75 2.87 3.12 3.41 3.74 4.13 4.60


Building construction equipment – Import value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 164.86 116.25 212.37 257.54 272.98 306.49 337.01 378.27 422.00 474.67


Tower Cranes 14.74 7.53 11.66 12.29 13.42 13.87 15.06 16.01 17.39 18.77

Mobile Cranes 93.51 67.90 131.79 174.93 180.95 215.14 235.89 272.67 306.54 350.78



14.53 8.90 13.66 19.22 19.74 21.67 23.88 26.53 29.63 33.31



Mixers 4.17 2.74 4.36 6.26 6.45 7.09 7.82 8.71 9.74 10.95

Concrete Pumps 2.10 1.72 2.22 3.21 3.31 3.61 3.95 4.34 4.80 5.34


Building construction equipment – Production value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 4.31 2.20 4.16 5.73 6.21 6.87 7.64 8.54 9.59 10.78


Tower Cranes 0.21 0.16 0.27 0.36 0.38 0.42 0.46 0.51 0.56 0.62

Mobile Cranes 3.23 1.69 3.26 4.54 4.91 5.43 6.03 6.73 7.54 8.46



0.75 0.27 0.51 0.71 0.78 0.88 0.99 1.12 1.27 1.45



Mixers 0.25 0.08 0.16 0.22 0.25 0.28 0.32 0.36 0.41 0.48

Concrete Pumps 0.24 0.09 0.15 0.20 0.23 0.25 0.29 0.32 0.36 0.41


Building construction equipment – Export value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 25.01 30.27 33.04 35.29 37.23 40.35 43.91 48.11 52.92 58.45


Tower Cranes 0.46 0.66 0.73 0.80 0.90 0.99 1.11 1.25 1.40 1.58

Mobile Cranes 22.16 27.33 29.28 31.11 32.64 35.24 38.20 41.69 45.67 50.23



0.66 0.91 1.28 1.53 1.67 1.84 2.04 2.28 2.55 2.87



Mixers 0.31 0.47 0.65 0.71 0.78 0.85 0.94 1.05 1.18 1.32

Concrete Pumps 0.23 0.30 0.44 0.61 0.66 0.73 0.80 0.89 0.99 1.12


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Earthmoving & tunnelling equipment – Market value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 1,714.69 987.36 1,712.01 2,284.24 2,344.45 2,547.18 2,802.89 3,045.59 3,362.65 3,705.12

Earthmoving Equipment 1,605.31 899.98 1,580.81 2,123.55 2,184.89 2,373.11 2,612.99 2,840.44 3,138.69 3,461.19

Bulldozers 449.39 170.41 451.35 580.54 628.63 652.55 706.45 727.94 779.35 820.84

Dumper Trucks 323.82 233.75 353.82 458.84 449.32 509.46 571.33 640.32 720.68 812.64

Construction Tractors 3.52 2.36 3.17 4.11 4.32 4.71 5.13 5.60 6.14 6.75

Graders & Levellers 147.42 102.35 115.35 148.70 136.46 147.11 158.21 170.86 186.68 204.53

Loaders (Overground Use) 192.78 95.86 133.44 183.91 186.34 209.07 230.12 254.73 283.37 316.23

Scrapers 1.55 1.09 1.34 1.54 1.55 1.71 1.86 2.05 2.26 2.51

Excavators (Construction Use)

486.84 294.16 522.34 745.91 778.27 848.51 939.88 1,038.93 1,160.21 1,297.69

Tunnelling Equipment 109.38 87.38 131.20 160.69 159.55 174.06 189.90 205.15 223.97 243.92

Rock Cutting Machinery 2.44 1.50 2.33 2.89 2.61 2.95 3.25 3.59 3.97 4.42

Boring or Sinking Machinery 106.94 85.88 128.87 157.80 156.95 171.12 186.65 201.56 220.00 239.50


Earthmoving & tunnelling equipment – Import value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 1,131.92 823.85 1,156.62 1,407.69 1,309.51 1,455.86 1,559.57 1,677.93 1,814.60 1,970.44

Earthmoving Equipment 1,000.41 705.68 1,005.79 1,215.91 1,114.03 1,241.59 1,324.90 1,422.39 1,533.58 1,661.48

Bulldozers 189.24 131.97 183.20 224.95 167.12 192.78 167.29 150.31 123.55 97.95

Dumper Trucks 329.24 228.44 347.94 448.45 433.62 493.74 554.15 621.44 699.90 789.64




Scrapers 0.91 0.72 0.82 0.89 0.83 0.92 0.99 1.07 1.17 1.28


241.63 180.00 271.74 286.15 276.45 292.12 318.40 340.36 369.70 399.25





Earthmoving & tunnelling equipment – Production value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 715.29 234.31 700.95 1,054.74 1,181.89 1,255.23 1,422.30 1,563.81 1,764.60 1,974.92

Earthmoving Equipment 714.04 233.66 699.86 1,053.27 1,180.34 1,253.52 1,420.41 1,561.67 1,762.18 1,972.17

Bulldozers 306.02 66.68 333.27 424.40 514.76 517.01 599.58 640.99 722.68 793.57

Dumper Trucks 21.63 8.78 15.06 22.33 24.06 26.48 29.27 32.48 36.16 40.41




Scrapers 0.68 0.40 0.58 0.70 0.77 0.85 0.94 1.05 1.17 1.31


269.91 122.26 293.36 515.09 545.30 604.10 674.34 757.43 856.58 972.91





Earthmoving & tunnelling equipment – Export value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 115.28 94.95 95.74 123.93 137.76 150.56 164.29 180.18 198.90 220.79

Earthmoving Equipment 93.10 61.97 77.71 93.64 100.60 109.52 118.58 128.68 140.57 154.24

Bulldozers 41.78 36.36 43.86 47.75 50.10 53.96 56.87 59.70 62.96 66.55

Dumper Trucks 22.46 5.79 3.43 6.37 7.90 8.72 9.78 11.04 12.48 14.14




Scrapers 0.02 0.03 0.04 0.04 0.05 0.05 0.06 0.06 0.07 0.08


19.77 13.87 26.61 36.21 38.77 42.60 47.18 52.59 59.06 66.64





Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Road construction equipment – Market value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 116.02 58.07 88.99 142.38 145.91 159.78 188.56 208.24 239.58 269.59

Road & Paving Equipment 103.33 49.47 74.48 120.86 125.98 137.00 163.43 180.45 208.72 235.22

Pavers 20.72 15.52 21.62 31.55 29.17 33.16 36.47 40.29 44.66 49.77

Rollers 82.61 33.96 52.85 89.31 96.82 103.83 126.96 140.16 164.06 185.46

Compaction Equipment 12.69 8.59 14.52 21.52 19.92 22.79 25.13 27.79 30.86 34.37

Compactors 1.08 0.83 1.38 1.90 1.79 2.03 2.24 2.48 2.76 3.07

Pile-Drivers & Pile-Extractors)

8.62 5.66 9.33 13.83 12.77 14.65 16.16 17.88 19.86 22.13

Tampers 2.99 2.09 3.80 5.78 5.36 6.10 6.72 7.43 8.24 9.17


Road construction equipment – Import value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 80.49 49.44 62.49 100.29 94.72 105.65 129.90 144.32 169.78 193.04


Pavers 21.47 15.77 21.15 31.30 27.96 32.21 35.44 39.16 43.43 48.43

Rollers 37.03 14.54 19.73 42.40 42.55 45.97 64.37 72.08 89.82 104.18


Compactors 1.17 0.78 1.19 1.58 1.37 1.57 1.72 1.89 2.08 2.31


13.82 13.67 13.66 16.06 14.26 16.30 17.88 19.66 21.73 24.09

Tampers 6.99 4.69 6.76 8.95 8.59 9.59 10.50 11.53 12.71 14.04


Road construction equipment – Production value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 73.11 34.47 57.36 75.93 81.79 88.58 96.24 104.98 114.92 126.20


Pavers 2.60 1.21 2.20 2.71 2.90 3.17 3.47 3.82 4.21 4.65

Rollers 65.91 30.24 50.40 67.38 72.45 78.28 84.84 92.32 100.81 110.45


Compactors 0.21 0.15 0.31 0.42 0.48 0.54 0.61 0.69 0.79 0.90


3.42 2.12 3.27 3.93 4.28 4.72 5.22 5.79 6.44 7.19

Tampers 0.97 0.75 1.18 1.49 1.68 1.88 2.10 2.36 2.67 3.01


Road construction equipment – Export value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 35.33 27.81 28.24 29.69 31.01 33.56 36.53 39.89 43.78 48.14


Pavers 2.98 1.24 1.28 1.68 1.84 2.00 2.20 2.42 2.68 2.99

Rollers 18.64 13.04 15.64 17.71 18.37 19.84 21.55 23.47 25.66 28.14


Compactors 0.29 0.08 0.08 0.06 0.06 0.07 0.08 0.09 0.10 0.11


8.48 10.11 7.26 5.75 5.83 6.31 6.87 7.50 8.23 9.06

Tampers 4.95 3.34 3.98 4.49 4.91 5.34 5.84 6.42 7.10 7.83


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Building material machinery – Market value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 159.67 107.48 180.89 219.00 222.55 245.88 264.79 291.26 320.89 357.38

Concrete & Cement Equipment 77.10 41.65 91.79 109.46 112.73 124.43 131.22 143.33 155.28 171.25

Concrete Batching Plants 36.23 19.64 43.37 49.08 52.97 57.51 61.88 67.35 73.73 81.55

Prefabricated Concrete Product Plants

9.47 3.10 6.57 9.35 9.46 11.08 11.77 13.31 14.66 16.61

Cement Plants 31.40 18.92 41.85 51.03 50.30 55.84 57.56 62.67 66.89 73.09

Mixing & Kneading Machines 9.72 6.37 8.35 9.33 10.01 11.15 12.19 13.34 14.71 16.27

Aggregate Equipment 72.85 59.46 80.74 100.22 99.82 110.30 121.39 134.59 150.90 169.86

Crushing & Pulverizing Equipment

51.54 41.85 60.93 77.73 76.73 84.95 93.56 103.76 116.52 131.24

Screening, Scrubbing & Separating Equipment

21.31 17.61 19.81 22.49 23.09 25.35 27.82 30.83 34.38 38.62


Building material machinery – Import value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 161.52 108.77 183.80 222.43 225.20 247.44 267.11 293.78 323.50 360.13




9.51 3.06 6.59 9.38 9.45 11.01 11.69 13.21 14.54 16.45

Cement Plants 31.38 18.81 41.95 51.37 50.50 55.65 57.51 62.59 66.76 72.93




51.85 41.96 61.65 78.53 77.00 84.90 93.92 104.14 116.93 131.69


22.55 18.76 21.17 24.01 24.66 27.01 29.75 32.98 36.80 41.36


Building material machinery – Production value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 1.61 0.73 1.58 2.23 2.67 3.13 3.68 4.32 5.07 5.94




0.05 0.01 0.07 0.11 0.14 0.17 0.21 0.25 0.30 0.36

Cement Plants 0.31 0.17 0.33 0.51 0.57 0.68 0.77 0.90 1.04 1.21




0.58 0.28 0.46 0.60 0.68 0.78 0.89 1.03 1.19 1.38


0.13 0.08 0.05 0.10 0.12 0.13 0.15 0.17 0.20 0.22


Building material machinery – Export value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 2.27 2.43 2.93 3.30 3.57 4.00 4.50 5.07 5.75 6.55




0.02 0.01 0.02 0.03 0.04 0.05 0.05 0.06 0.07 0.09

Cement Plants 0.13 0.06 0.14 0.24 0.27 0.32 0.37 0.44 0.51 0.60




0.37 0.43 0.50 0.54 0.57 0.65 0.73 0.84 0.96 1.11


1.15 1.25 1.39 1.51 1.57 1.74 1.94 2.17 2.44 2.77


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Mining Equipment – Market value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 1,015.97 584.36 918.10 1,334.89 1,248.42 1,395.44 1,534.87 1,694.43 1,876.81 2,087.30

Coal Cutting Machinery 2.29 1.41 2.12 2.74 2.48 2.82 3.12 3.47 3.87 4.34

Mining Trucks 404.72 304.89 436.10 588.68 520.61 583.42 641.71 708.68 784.23 870.91

Loaders (Underground Use) 104.01 32.27 53.15 79.59 80.13 87.99 95.35 103.93 113.67 124.83

Excavators (Mining Use) 503.49 244.67 425.12 661.36 642.93 718.62 791.83 875.17 971.49 1,083.27

Mine Conveyors & Elevators 1.46 1.12 1.62 2.52 2.28 2.59 2.87 3.18 3.54 3.96


Mining Equipment – Import value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 625.68 438.91 664.11 917.65 768.63 879.14 963.12 1,058.74 1,166.92 1,290.50


Mining Trucks 424.65 304.51 445.78 597.45 512.60 582.55 640.76 707.71 783.26 869.99


Excavators (Mining Use) 186.99 124.77 203.45 300.21 241.05 278.12 302.24 329.01 359.48 393.85



Mining Equipment – Production value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 458.59 160.30 326.80 507.02 535.21 589.75 653.50 727.11 812.67 913.03


Mining Trucks 13.95 6.56 11.27 15.62 17.08 18.76 20.72 22.95 25.56 28.58





Mining Equipment – Export value [USD Million]

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Total 57.64 25.96 39.69 58.49 59.70 66.30 73.89 82.72 93.17 105.55


Mining Trucks 28.96 6.17 7.47 12.37 12.69 14.01 15.50 17.27 19.37 21.86



Mine Conveyors & Elevators - - - - - - - - - -


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




Equipment Definition

Cranes, lifting and handling equipment Cranes, lifting and handling equipment is used to facilitate in lifting and transporting all construction materials within the construction site.

Cranes and overhead lifting equipment Cranes and overhead lifting equipment are machines that are used to facilitate in lifting and lowering and horizontal transportation of heavy

materials within the construction site.

Mobile lifting frames Includes lifting frames that comprise tires and straddle carriers, which provide them with mobility.

Overhead traveling cranes Overhead traveling cranes comprise overhead tracks that are fixed to buildings or other supports and a crane that moves along this track.

Self-propelled lifting equipment (railed) Self-propelled lifting equipment includes lifting equipment that is mounted to run on rails in servicing building sites, mines and in other

similar conditions.

Tower and pedestal jib cranes Includes portal, tower, and pedestal jib cranes.

Transporter, gantry and bridge cranes Includes power-driven overhead transporter and gantry cranes that have a top-running single-girder bridge/under-running multiple girder

bridge used for vertical lifting and lowering of freely suspended, unguided loads.

Lifting trucks Also known more commonly as forklift trucks, these trucks are small industrial vehicles used for lifting and transporting goods and materials.

Self-propelled forklift trucks Includes self-propelled forklift trucks comprised of two electric motor power-operated horizontal prongs that can be raised and lowered for

loading, transporting, and unloading goods.

Self-propelled trucks with lifting or handling

capability Includes self-propelled trucks fitted with lifting or handling equipment.

Other forklift trucks Includes non-electric forklift trucks and other works trucks fitted with lifting or handling equipment (excluding self-propelled trucks).

Lift and skip hoists Lifts and skip hoists provide fast and dependable lifting for material handling operations. Hoists are devices used for lifting or lowering a

load by means of a drum or lift-wheel around which rope or chain wraps.

Winches Winches are stationary motor-driven or hand-powered mechanical device, comprised of a drum shaped device, with rope or cable attached

around it that facilitates in lifting heavy loads.

Elevators and conveyors Elevators and conveyors are horizontal or vertical and inclined or declined motor driven machine for continuous moving or transporting bulk

materials or objects in a fixed path. Elevators and conveyors also have distinct points of loading and discharge.

Definitions – Key equipment


Equipment Definition

Buckets, shovels, grabs and grips Buckets, shovels, grabs and grips for ships' derricks, cranes, mobile lifting frames, work trucks fitted with crane, bulldozers, levelers,

excavators, shovel loaders, and so on, for snow ploughs.

Bulldozers Driver-operated self-propelled heavy machines used for shifting large amounts of earth, soil, sand, rubble and other debris for leveling the

ground. They comprise a tractor and a metal blade in the front.

Crawler Bulldozer Also known as a track bulldozer, it moves on tracks such as heavy rubber or steel treads instead of wheels, which provide them with

enhanced stability and enable these machines to move on uneven surfaces. Crawlers are generally used for hauling purpose.

Wheeled Bulldozer

Also known as tire bulldozer, it moves more swiftly, compared with crawlers. Wheeled bulldozers are lighter and swifter but less powerful

and stable, when compared with crawler bulldozers, and are generally used for leveling of large construction sites and moving large

amounts of earth or other material.

Excavators Also known as mechanical shovels and diggers, they are heavy construction equipment used to dig soil and soft/hard rock and transport the

material from one place to another using hauling units.

Crawler Excavator These are excavators with tracks used to dig earth on rough terrains. They have higher power compared with wheeled excavators.

Wheeled Excavator These are excavators with wheels to facilitate better mobility on roads. They eliminate the necessity of extra units, such as trailer, and are

usually small-to-medium in size.

Dumper trucks A vehicle used to transport and unload materials such as sand and gravel from one place to another in a construction activity. It is also

known as hauler and tipper. It includes dump trucks for off-highway use.

Construction tractors These are vehicles used in construction sites, along with trailers, to transport materials from one site to another and for various

earthmoving applications. This category includes track-laying tractors.

Graders and levelers They are heavy construction equipment used to produce a smooth and flat surface. Also termed as maintainer, patrol or road grader, these

are sometimes used to clear snow and debris. These include motor graders and levelers.

Loaders They are medium-to-heavy construction equipment, fitted with a bucket or shovel at the front end to remove and load earth or other such

loose material into a dumper.

Underground These are loaders, especially made for use in underground construction activity.

Definitions – Key equipment (continued)


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




All WMI reports are rigorously sourced and created according to a comprehensive three-stage methodology: 1) Market study • Standardization Market definitions are specified using recognized industry classifications. The same definition is used for every country. Annual average currency exchange rates are collected for the latest complete year. These are applied across both historical and forecast data to remove exchange rate fluctuations. • Review of in-house databases to gather existing data: Historic market databases and reports Company databases Construction magazine portfolios Construction projects databases Trend monitoring and primary research Review of the latest construction companies and project trends • Biannual surveys using expert panels compiled from across

the construction value chain: Construction contractors Equipment and material manufacturers and suppliers Architects and designers Project owners and financiers Project advisors 2) Research • Collection of the latest market-specific data from a wide

variety of respected industry sources: Government statistics Industry associations

Company filings Broker reports International organizations Expert opinion • Collation of opinion taken from WMI journalist interviews

with leading industry figures • Analysis of third party opinion and forecasts: Broker reports Industry associations Construction media Official government sources • Data consolidation and verification Consolidation of data and opinion used to create historical datasets Creation of models to benchmark data across sectors and geographies 3) Analysis • Feed of forecast data into market models: Macroeconomic indicators Industry-specific drivers • Analysis of the WMI Construction Projects Database to

identify trends by sector: Latest project announcements Financing shortfalls Project cancellations and postponements • Analysis of market data • Discussion of company and industry trends and issues • Integration of survey results

Research Methodology


Market Overview



• Construction

• Materials

• Mining


• Supply-side

• Demand-side

Market Size

• Overview






Appendix

• Definitions




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Construction Equipment in Indonesia A Market Appraisal - April 2013

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Transcript of Construction Equipment in Indonesia A Market Appraisal - April 2013