INDONESIAN CONSTRUCTION AGGREGATES MARKET

Indonesian Construction Aggregates Market is estimated to grow at a CAGR of 5.6% during the forecast period till 2031 owing to the growing investments in infrastructure, rapid urbanization, and the government initiatives in construction projects.

Major Indonesian Construction Aggregates Market Drivers and Trends

Increased funding from private and public sectors for infrastructure projects including roads and residential complexes has led to an increase in construction projects throughout urban areas. These rising construction activities have fostered the demand for aggregates like sand and gravel which leads to significant market expansion. The expanding population and rapid urbanization in multiple provinces have also heightened the demand for enhanced housing facilities. This trend has positively affected the need for cement which drives up the necessity for aggregate materials important for constructing commercial and residential buildings. Consequently, the Indonesian construction aggregates market size is set for strong growth in the foreseeable future. 

The Indonesian construction aggregates market trends will see positive growth propelled by requirement from several infrastructure projects across the archipelago. One of the major initiatives is the construction of a new capital city which is called Nusantara in Kalimantan with an estimated budget of USD 35 billion. It is intended to replace Jakarta, the current capital located on Java Island which is densely populated and faces rapid sinking caused by excessive groundwater extraction. The Nusantara initiative will significantly drive the Indonesian aggregates industry as it will necessitate substantial quantities of materials for infrastructure and road development. The primary origin of these aggregates is western Sulawesi largely because of its close distance and direct sea connection to Borneo. Additionally, the aggregates demand is bolstered by ongoing initiatives in road, airport, and port construction with notable projects such as Majalengka Airport in West Java and Maleo Airport in Central Sulawesi.

Cement manufacturing company PT Semen Indonesia predicts that the establishment of Nusantara will lead to a potential requirement of 21 million tonnes of cement in the next twenty years. The company further highlights that the cement sector’s future prospects are strengthened by anticipated population growth of approximately 1% annually from recently 270 million people, which will drive increased demand for infrastructure and housing. Indonesia’s aggregates industry is seeing significant growth, supported by investments exceeding USD 104 billion in road infrastructure across the country. Meeting the demand for building materials to support such a large investment can be challenging for numerous firms, but one contractor near Yogyakarta, PT Berdikari Putra Perkasa, is utilizing a Volvo CE EC200D to fulfill this requirement.

However, there are some challenges that can hamper this market expansion and development. Some suppliers of raw materials for construction aggregates may employ inadequate quality control measures due to the absence of standardized practices among a few manufacturers in this sector. As a result, this often leads to lower-quality products being consumed by the majority of consumers, which hinders total production output and restricts potential growth opportunities in the Indonesian construction aggregates market. 

Based on the product type, the market can be segmented into crushed stone, sand and gravel, recycled aggregates, among others. Crushed stone is set to maintain its position as the primary product type driven by its excellent durability and advantageous pricing, and it is projected to achieve the highest growth rates due to its wide availability. Meanwhile, growth in the sand and gravel segment is also anticipated driven by growing demand from the residential sector.

By application, the market segmentation includes infrastructure, commercial, industrial, residential, and others. Infrastructure is forecasted to dominate the market segment in the coming years fostered by expanding infrastructure development and increased governmental focus on infrastructure initiatives.

Several prominent players within the market include PT Semen Indonesia, Caterpillar, Volvo CE, among others.

Segments covered in the Report:

The Indonesian Construction Aggregates Market has been segmented on the basis of Type and Application. Based on the Type, the market is segmented into Crushed Stone, Sand & Gravel. Based on the Application, the market is segmented into Residential, Commercial, Infrastructure & Industrial.

Market Segmentation

Indonesian Construction Aggregates Market by Type

• • Crushed Stone
  • Sand & Gravel

Indonesian Construction Aggregates Market by Application

• • Residential
  • Commercial
  • Infrastructure & Industrial