Consolidation in cement industry
Domestic cement consumption might grow 6 million tons per annum from full implementation of President Prabowo’s ambitious three million homes per annum program. That would be significant to reduce the pathetic oversupply which hit the industry in the past 15 years or so. Doubts over the program, however, might force faster consolidation in the cement industry.
Sritex: Inevitable Layoffs
Peaceful demonstration by Sritex workers, initially scheduled for January 14-15, 2025, is postponed indefinitely. It is reported that around ten thousand of workers at PT Sri Rejeki Isman (Sritex), which has officially been declared bankrupt since October last year, seek for justice as they are now subject to inevitable layoffs.
Patimban port expansion
Japanese car manufacturers invested billions of USD to grow capacity in Indonesia in the past decade. Domestic car manufacturing capacity is now around 2.4 million units per annum, while car sales have not returned to above 1 millionn per annum.
Hospitality business expansion
When it comes to ability to attract foreign tourists/visitors, Indonesia is way behind neighbouring countries like Thailand, Malaysia, Singapore, and Vietnam. The country’s huge population, however, continues to attract investments in hospitality business. Some see potential future demand despite recent correction of middle class.
Toll road projects update
President Prabowo Subianto has instructed to stop several major projects, including the construction of new toll roads. The President was said not to initiate the construction of new toll road projects during his leadership. In the future, the Government will only focus on completing the projects that are already in the construction phase.
Steel industry update
Indonesia recorded trade surplus of US$13.7 billion from iron and steel (HS 72) in the first eleven months of 2024, down slightly from US$14 billion in the corresponding period last year. Higher volume offsetted substantial correction of steel prices.
CNBM strengthens grip
China Jushi Co Ltd, member of China National Building Material (CNBM), one of the largest construction material producers in the world, has committed to invest US$1 billion in Indonesia to build a fiberglass factory.
Petrochemical investments to watch
Indonesia is among the world’s major importers of plastics and organic chemicals, among others due to poor structure of the domestic industry. In the first eleven months of 2024, import of plastics and articles from plastics reached US$9.7 billion, an increase of 12.1% from the corresponding period last year.
Mass transportation projects update
MNC Land (KPIG) has sold its assets worth Rp5.5 trillion in Bali Island to PT Bumi Indah Permai (BIP), the main investor of Bali Urban Subway. The transaction, which aims to fund the Bali Subway project, is targeted to be completed by January 2025. Later, BIP will use the assets for the construction of the Bali Urban Rail and Associated Development (Bali Subway) project.
Expansions in beverage industry
Eastroc Beverage, Chinese energy and electrolyte drink manufacturer plans to invest up to US$200 million to build a factory in Indonesia in order to meet growing demand for high-standard soft drinks among consumers in Southeast Asian countries.