Monday, 31 August 2015


Increasing demand for building materials at home, in line with the Government’s plan to run development at titanic scale toward the Asean Economic Community by end of 2015 demanded players of the building material industry to anticipate upjump of demand. The vast amount of need for construction materials called for effective strategy for increasing output capacity of the industry. The Government motivated national businesspeople in the industry including collaboration with foreign industrialists.

Indisputably, the building material industry was now the Government’s new source of income to meet the 300% export target for the next 5 years. Evidently export of building materials to many countries had been able to score a 2 digit growth each year. Nus Nuzulla Ishak, Director General of National Export Development, Ministry of Trade stated in Jakarta on Thursday (4/6) that the Government was encouraging national businesspeople not just to meet domestic need but also to promote export of building materials.

Data of the Ministry of Trade had it that through 2010 – 2014, export of building materials grew on the average by 11.13% per year from USD 1.55 billion to USD 2.45 billion (around Rp.31.8 trillion) per year for market of Singapore, Thailand, Australia and the USA.

According to Nus Nuzulia Iskak, the growth potential for export of building material industry in Indonesia was remarkably high. This was because Indonesia had abundant resources of natural raw materials.

Today the market potential of building materials for the world worth USD 400 billion not including Saudi Arabia where infra-structure building was going on remarkably fast. Nur rated that product quality was advancing as well. Indonesian building materials products were well. Indonesian building materials producers were making expansions abroad.

Nur elaborated that beside the export market, of building materials product at home had been growing significantly, being driven by fast growing property projects and real estate at home, increasing private investment and Government’s expenditure. The contribution of construction sector to national GDP at home had grown from around 7.07% in 2009 to become 13% in 2014 which had jacked up growth of building material industry in Indonesia.

The construction sector played its important role in the economy of a nation because it influenced most of other sectors and was important contributor to infra structure building as storng physical foundation for national development.

Therefore in tandem with all the effort to build the construction sector, this year the Government of RI set economic growth target at 5.8% with infra-structure sector as the main propeller of growth.

Meanwhile in terms of need for cement as building material, the Ministry of industry estimated total national capacity of cement in 2017 would come to 102 million tons to meet total need of 70 million tons per year in line with high investment in the cement industry. harjanto, the Director General of Chemical Industry stated that although there would be over production of cement, he would not propose the industry to be categorized as negative list of investment. Besides, other technical requirement was that production capacity of a cement factory must not to be more than 3 times the need for cement in a province.

Furthermore the technology being applied must be environmentally friendly and energy efficient. Hence the investment entering the industry must be really competitive, green and be located outside Java. Furthermore there were some technical specification to be fulfilled by investors. (SS)

Business News - June 10, 2015

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