Indonesia Ready Mix Concrete Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

Indonesia Ready Mix Concrete Market Analysis

The Indonesia Ready Mix Concrete Market size is estimated at 107.22 million Cubic meters in 2024, and is expected to reach 162.40 million Cubic meters by 2030, growing at a CAGR of 7.16% during the forecast period (2024-2030).

Indonesia's ready-mix concrete industry is experiencing significant transformation driven by extensive infrastructure development initiatives. The government's commitment to infrastructure development is evident through its allocated budget of approximately IDR 392 trillion for infrastructure development in 2023, representing a 7.2% increase from the previous year. This substantial investment encompasses various projects, including the ongoing development of the Patimban Port (2020-2027), Soekarno-Hatta International Airport's Terminal 4 (2021-2024), and the Kayan Hydro Power Plant. The focus on infrastructure modernization has created a robust demand pipeline for ready-mix concrete manufacturers, particularly in large-scale projects requiring consistent quality and efficient concrete delivery systems.

The industry's concrete production methodology is witnessing a significant shift toward more efficient and quality-focused approaches. Transit mixed concrete has emerged as the dominant production method, accounting for 73% of the country's ready-mix concrete demand in 2022, primarily due to its cost-effectiveness and flexibility in delivery. This trend is particularly pronounced in the residential sector, which remains the largest consumer segment, holding approximately 40% of the total ready-mix concrete consumption in 2022. The preference for transit mixed concrete is driven by its ability to maintain quality during transportation and its suitability for various construction materials applications, from residential complexes to commercial structures.

Environmental sustainability has become a crucial focus area in Indonesia's concrete industry. The government has set ambitious targets, including the construction of 1 million green residential buildings by 2030 and achieving 100% carbon emission-free houses by 2050 through initiatives like the Indonesia Green Affordable Housing Program. This environmental push is reshaping product development and manufacturing processes, with producers increasingly incorporating sustainable practices and materials. The industry's transformation is further emphasized by the projected requirement of USD 322.8 billion for climate-compatible infrastructure and climate assets by 2030, with energy and transport sectors accounting for 75% of this investment.

The industry's structure is evolving with a clear emphasis on vertical integration and technological advancement. Major producers are investing in integrated facilities that combine production, quality control, and logistics capabilities to ensure consistent supply and quality. The industrial and institutional sector, accounting for 31% of the total new floor area in 2022, has become a key driver of technological adoption in concrete production. This sector's requirements for high-performance concrete have led to innovations in mix designs and delivery systems, particularly in the development of specialized concrete technology formulations for specific applications such as high-rise buildings and industrial facilities.

Indonesia Ready Mix Concrete Market Trends

Indonesian commercial real estate market volume is projected to reach USD 1.39 trillion by 2028 and is likely to augment the demand for commercial sector

• In 2022, Indonesia witnessed a 9.7% decline in the volume of new commercial floor area compared to the previous year. This drop was a result of a return to normalcy following a decline in building activities during the COVID-19 pandemic. Even before the pandemic, commercial buildings in Indonesia were already showing a downward trend in annual energy intensity, accounting for a rate of 2.64% per year. However, in 2023, the country saw a rebound, registering a 5.7% increase in the volume of new commercial floor area, driven by a surge in foreign direct investment (FDI) necessitating new offices, warehouses, and retail spaces.
• Amidst the COVID-19 pandemic, in 2020 and 2021, Indonesia witnessed a significant surge in the volume of new commercial floor area, accounting for approximately 9.6 million square feet. The government's focus on revitalizing the economy led to measures such as easing construction-related quarantines, both in private and public projects. This allowed employees to resume work on-site and companies to continue their operations. Notably, the value of completed constructions in Indonesia stood at around IDR 1.32 quadrillion in 2020 and rose to IDR 1.42 quadrillion in 2021.
• The volume of new commercial floor area in Indonesia is projected to witness a robust growth of around 58.72% by 2030 compared to 2023. This surge is driven by a rising demand for shopping malls, offices, and other commercial spaces. The retail real estate segment is emerging as a particularly captivating sector in the country. For instance, the volume of the commercial real estate market is anticipated to reach USD 1.39 trillion by 2028. The commercial new floor area in Indonesia is expected to maintain steady growth, registering a CAGR of 6.82% during the forecast period.

Increase in demand for housing units is likely to augment the residential sector's growth

• In 2022, Indonesia witnessed a 7.10% volume growth in residential new floor area compared to 2021. This surge can be attributed to increased population, wealth, and urbanization. The government-led housing aid reached IDR 29 trillion in 2022, which was projected to increase to IDR 32 trillion in 2023 under the Housing Financing Liquidity Facility scheme. This initiative aims to construct at least 220 thousand houses. The residential construction sector is poised to witness a significant growth rate. It was estimated to increase to approximately 56 million square feet in 2023 compared to the preceding year.
• In 2020, the volume of residential new floor areas in Indonesia grew by 7.06% compared to 2019. This was a strategic move by the government, prioritizing construction to mitigate the economic downturn and support households grappling with reduced incomes. Consequently, restrictions on construction activities, including quarantines, were significantly eased. However, in 2021, the trend reversed, with a decline of about 12.54% in residential new floor area, primarily attributed to a dip in foreign direct investment (FDI) in the construction sector. FDI for construction plummeted by 51% in 2021 compared to the previous year.
• The residential new floor area in Indonesia is projected to witness a CAGR of 6.08% in volume during the forecast period. This growth stems from the country's increasing urbanization, bolstered by government initiatives and foreign and domestic investments. These factors, directly and indirectly, underscore the mounting housing needs in the nation, ultimately driving residential building construction. Projections indicate that to meet the escalating demand, the country would require between 820,000 and 1 million housing units annually by 2030.

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Segment Analysis: End Use Sector

Residential Segment in Indonesia Ready Mix Concrete Market

The residential sector maintains its dominance in Indonesia's ready mix concrete market, commanding approximately 47% market share in 2024. This substantial market position is primarily driven by the government's ambitious Housing Financing Liquidity Facility scheme, which aims to construct at least 220,000 houses. The sector's prominence is further reinforced by Indonesia's rapid urbanization and population growth, creating sustained demand for residential concrete infrastructure. The government's commitment to constructing 1 million green residential buildings by 2030 and achieving 100% carbon emission-free houses by 2050 through initiatives like the Indonesia Green Affordable Housing Program continues to fuel the segment's growth. Additionally, the rising adoption of transit mixed concrete in residential construction, accounting for nearly 76% of the sector's consumption, demonstrates the segment's preference for cost-effective and efficient concrete solutions.

Commercial Segment in Indonesia Ready Mix Concrete Market

The commercial segment emerges as the fastest-growing sector in Indonesia's ready mix concrete market, projected to witness robust growth of approximately 9% during 2024-2029. This accelerated growth is primarily attributed to the surge in foreign direct investment necessitating new offices, warehouses, and retail spaces. The International Workplace Group's ambitious plans to establish 1,000 flexible workspaces across Indonesia cater to the rising demand for hybrid work solutions, driving the segment's expansion. The retail real estate segment is particularly captivating, with the commercial real estate market volume anticipated to reach USD 1.39 trillion by 2028. Commercial concrete is gaining significant traction in this sector due to its time and labor-saving attributes, becoming the preferred choice for large-scale commercial projects.

Remaining Segments in End Use Sector

The industrial & institutional and infrastructure segments play crucial roles in shaping Indonesia's ready mix concrete market dynamics. The industrial & institutional sector benefits from the country's strategic diversification into manufacturing, education, and healthcare sectors, with notable projects like the Pomalaa Nickel Processing Plant and Tanjung Enim Coal Gasification Plant driving demand. Meanwhile, the infrastructure segment's growth is supported by key national projects including the Kayan Hydro Power Plant, Patimban Port development, and Soekarno-Hatta International Airport's Terminal 4. Both segments demonstrate unique preferences in concrete mixing types, with shrink mixed gaining popularity in industrial concrete applications and central mixed being preferred for infrastructure projects requiring high-quality concrete specifications.

Segment Analysis: Product

Transit Mixed Segment in Indonesia Ready Mix Concrete Market

Transit mixed concrete dominates the Indonesian ready mix concrete market, commanding approximately 74% market share in 2024. This significant market position is primarily attributed to its cost-effectiveness and elimination of the need for admixtures in most applications, making it an economically viable choice for contractors and construction professionals. The segment's dominance is particularly evident in the residential sector, where it accounts for the majority of ready mix concrete consumption due to its affordability and ease of use in housing projects. The widespread adoption of transit mixed concrete is further supported by Indonesia's expanding construction industry, particularly in urban areas where rapid development necessitates efficient and cost-effective concrete solutions.

Shrink Mixed Segment in Indonesia Ready Mix Concrete Market

The shrink mixed segment is experiencing robust growth in the Indonesian ready mix concrete market, projected to grow at approximately 8% during 2024-2029. This accelerated growth is primarily driven by its unique advantages, combining benefits of both central and transit mixed types while offering enhanced operational efficiency and increased concrete delivery capacity. The segment's growth is particularly notable in infrastructure and commercial construction projects, where its shorter mixing periods at plants and reduced ingredient volumes provide significant operational benefits. The adoption of shrink mixed concrete is especially prominent in projects situated away from urban centers, where its versatility and efficiency make it an increasingly preferred choice among contractors and developers.

Remaining Segments in Product Segmentation

The central mixed segment continues to play a crucial role in Indonesia's ready mix concrete market, particularly in projects requiring high-quality concrete with enhanced consistency. This segment is especially vital in infrastructure development and large-scale commercial projects where quality control and precise concrete mixing specifications are paramount. Central mixed concrete's significance is reinforced by its widespread use in critical infrastructure projects and high-rise buildings, where its superior quality control capabilities and faster production rates compared to transit-mixed plants make it indispensable for demanding construction applications.

Free With This Report

We provide a complimentary and exhaustive set of data points on global and regional metrics that present the fundamental structure of the industry. Presented in the form of 24+ free charts, the section covers rare data on newly built floor area, infrastructural spending, and existing construction floor area across residential, commercial, industrial and institutional sectors.