Indonesia Ready-mix Concrete Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Key Highlights

• One of the major factors driving the market forward is the increase in investments in the real estate sector. Furthermore, the superior technical features of ready-mix concrete offer it an advantage over conventional concrete, propelling the market forward.
• On the contrary, the ease of availability of potential substitutes is expected to hinder the growth of the market studied.
• More money is being put into commercial projects, and more people are learning about ready-mixed concrete. This is likely to lead to new opportunities in the future.

Indonesia Ready-mix Concrete Market Trends

Increasing Investments in the Real Estate Sector

• The key drivers of Indonesia's construction sector growth are increased investments and construction activities in the residential and infrastructure sectors. Foreign direct investments are expected to fuel the Indonesian real estate sector.
• In the post-COVID era, to make the infrastructure sector more investor-friendly, the country amended the law on public-private partnerships and passed new land purchase laws as well.
• The official figures from Statistics Indonesia reflected that the gross domestic product (GDP) from real estate activities in Indonesia amounted to IDR 468.22 trillion (USD 29.85 trillion) in 2021, rising by a mere 3% as compared to the previous year.
• The Indonesian government introduced the "One Million Houses’ (OMH) program to construct at least 1 million units per year. According to the Ministry of Public Works and Public Housing (PUPR), under the "One Million Houses" program, about 1,117,491 housing units were recorded until the end of 2022.
• The first wave of Proptech in Indonesia began when the middle class wanted to buy more homes because the economy was getting better and helping it grow.Proptech is becoming more popular as a result of the high concentration of selling, purchasing, and leasing on search portal corporations.
• Foreign direct investment into Indonesia (excluding investment in banking and the oil and gas sectors) increased by 10.1% Y-o-Y to a record high of IDR 122.3 trillion (USD 8.50 billion) in the fourth quarter of 2021, rebounding sharply from a 2.7% drop in the previous year.
• In the past few years, new real estate projects in the country have driven the Indonesian property sector. Jakarta's architectural design and the building of the country's new capital have brought in investors from all over the world.
• Thus, affordable housing projects in Indonesia, funded by the government, international investors, and organizations such as the World Bank, are expected to boost real estate market growth during the projected period. This in turn would lead to the growth of the ready-mix concrete market in the country during the forecast period.

Increasing Infrastructural Construction Activities

• Ready-mixed concrete is the best material for building buildings and other large structures made of concrete.It is used to build office buildings, hotels, stores, malls, dams, and roadways, among other things.
• Growing demand for space in the e-commerce sector is driving up demand in the building sector. Investment in the private sector has also increased as transparency and returns have improved.
• Indonesia had resumed the process of relocating its capital from Jakarta to Nusantara. In 2019, the project was announced for the first time. However, according to the Nusantara National Capital Authority (NNCA), the first phase of development began in the second quarter of 2022 and is expected to be finished by the end of 2024.
• The total cost of the whole project is estimated to be around USD 31 billion, and it is expected that about 75% of the total finance will be covered through foreign investments.
• Infrastructure development looks promising for Indonesia as well, with the government planning to invest over USD 400 billion between 2020 and 2024. The government intends to spend 60% of the budget on transport infrastructure, whereas 17% and 10% of the budget will be spent on the expansion of the country's power generation capabilities and water industry, respectively.
• Furthermore, Indonesia plans to construct a 900 MW hydropower plant in Kayan River, North Kalimantan (Kaltara).The project is in the EPC stage, with a scheduled start-up date of 2022. The project is planned to be commissioned in 2025 after the construction is completed.
• All of these things are likely to increase the demand for ready-mix concrete in the commercial sector of Indonesia over the next few years.

Indonesia Ready-mix Concrete Industry Overview

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support