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A look at ceramics in Indonesia

 

 
Domestically, Indonesia’s ceramic industry is showing signs of strain. This means there are some big opportunities for international ceramic suppliers to make their mark on the Indonesian market.  
 
The state of the Indonesian ceramics market
 
During Indonesia’s recent property boom, demand for top quality ceramics reached peak levels. 2016, however, has seen a slowdown in the Indonesian property sector which is affecting domestic tile sales levels.
 
Despite this, 2015 still saw massive volumes of tiles shift across Indonesia. Sales of ceramic tiles stood at around $1.8 billion dollars. Indonesia is the sixth largest consumer of tiles globally, with close to 350 million square metres being sold each year. 
 
Indeed, Elisa Singa, Chairman of the Indonesian Ceramic Industry Association (ASAKI), is confident the current downward trends will reverse in 2016. Indonesia is pushing through large-scale infrastructure and residential construction projects. Mr Singa believes these will boost ceramic sales to around 170-180 million square metres in the first half of 2016.
 
Indonesia sources 90% of its tile demand from domestic producers, but the remaining 10% is imported from overseas. In monetary terms, this means $180 million dollars’ worth of ceramic tiles are imported by Indonesia each year.
 
Domestic production capacity is high. Instilled production capacity grew by 7.7% in 2015 to reach a total of 560 million square metres. However, since the industry was starting to show signs of decline, additional manufacturing plants constructed in the last few years remain unused. 
 
How can foreign firms enter the ceramic tiles sector in Indonesia?
 
While domestic producers dominate the market, there is a wide range of options for foreign firms to explore when it comes to establishing themselves in Indonesia. 
 
Over 90% of the raw materials needed for ceramic tile production is imported from overseas. This includes essential products such as construction chemicals and clays. Indonesia is a mineral-rich country, but Indonesia Investments, an Indonesian business guide, suggests a lack of raw supplies is hampering domestic production.
 
The most obvious route to the market is selling directly to consumers via distributors. Indonesia is replete with businesses who focus solely on importing top quality products from overseas. Wholesalers such as PT Raspari Granitonusa and Franklin Export/Import Limited can offer international firms a country-wide base to begin with. DIY chains, such as Ace Hardware, allow foreign companies a direct channel to consumers.
 
One strong strategy to pursue for foreign firms would be to exploit the gaps in domestic production by setting up manufacturing hubs in Indonesia. A highly skilled, pre-existing workforce already exists in Indonesia. European manufacturers could certainly utilise Indonesia’s current production facilities to begin manufacturing products in a captive market.
 
Given Indonesia’s status as a leading AESAN Economic Community member, internationally renowned brands can likely exploit growing free trade opportunities in the region. Success in Indonesia’s ceramics market may lead onto increased sales across South-East Asia as a whole.
 
Attending globally recognised trade shows, such as IndoBuildTech, also gives manufacturers and exporters, alongside importers, the space to interact with the Indonesian ceramic industry’s key players. Here, exporters and suppliers can ensure their products are seen by over 35,000 buyers while other attendees can see the latest innovations Indonesian producers have to offer. Learn more about IndoBuildTech today.
 
 

 


Related Events

Event20 Mar

Indobuildtech Ja..

20-24 March, 2019
INDONESIA

JAKARTA, INDONESIA
Venue: INDONESIA CONVENTION EXHIBITION CENTER (ICE)

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