IHS: Why are leading industrial manufacturers eyeing the Indonesian market?
01/02/2016 IHS (Incorporating IMS Research)
Joanne Goh, analyst for Manufacturing Technology at IHS Inc, comments:-"The 2015 International HVACR/PS conference in Jakarta, Indonesia gathered many professionals within the heating, ventilating and air conditioning (HVAC) industry, including the top suppliers of industrial pumps, valves and compressors. Following the conference, two key takeaways from both global and regional market players were apparent:
The original equipment manufacturers (OEMs) are looking to expand their presence in Indonesia, especially within the building automation industry.
The tier-one and tier-two manufacturers are looking for distributors and other partnership opportunities within the Southeast Asian region.
Southeast Asia's emerging countries, especially Indonesia, are the greenfield markets that currently offer great opportunities to adopt fast-growing building automation technologies to incorporate "green" building innovations. IHS predicts that the Indonesian construction industry will outpace the construction sectors of other countries in the Southeast Asian region from 2014 through 2019. The compound annual growth rate (CAGR) of construction spending for Indonesia is projected to be 10.2% during this same timeframe.
In Indonesia, the new administration of President Joko Widodo is committed to pursuing an aggressive reform agenda, focused on improving the business climate in order to regain investor's confidence in construction development. The non-residential construction market is closely tied to the country's economy, which is forecast to be moderately positive through 2019. Among all construction spending plans, non-residential structures is estimated to be the fastest growing sector through 2019, with office building construction serving as the main driver of this growth. The industrial construction sector is estimated to account for close to 50% of total non-residential construction spending during the same period. Due to a growing population as well as rapid urbanization and industrialization, municipalities and utilities will require construction projects including water distribution networks and desalination. Additionally, low-end manufacturing continues to shift from China to Southeast Asia, as China may soon be struggling to remain the global manufacturing hub due to unit price hikes. As a result, the food processing and other low-cost manufacturing industries will remain the largest markets in the Indonesian industrial sector.
Construction spending in Indonesia has seen and will continue to see healthy growth from 2014 to 2019 at a CAGR of 5.4%, with growth led by the nonresidential structures segment. Specifically, in 2016 total construction spending is expected to increase 5.5%. The opportunities in the construction market will continue to attract more OEMs to enter the Indonesian market, and there will be an increased focus on distributors and partnerships within the building construction industry."
For more information, please contact:
Joanne Goh
Analyst
Manufacturing Technology
IHS Global Inc
1700 E Walnut Ave
El Segundo
CA, 90245
US
Tel: +1 512 813 6266
Email: joanne.goh@ihs.com
Web: www.ihs.com
Print this articleProcess and Control Today are not responsible for the content of submitted or externally produced articles and images. Click here to email us about any errors or omissions contained within this article.