Heavy Equipment Market in Indonesia Burdened by Low Commodity Prices
The production of heavy equipment in Indonesia in the first half of 2014 fell by 25 percent (year-on-year) to 2,292 units. The decline in production is due to the still weak state of the mining and construction sectors in Southeast Asia’s largest economy. Main reasons being the implementation of the mineral ore export ban in January 2014 and low commodity prices, for example coal. Limited construction projects have been undertaken in the first half of 2014 as investors wanted to wait for the results of Indonesia’s legislative and presidential elections first.
Most of sold heavy equipment in the first half of 2014 in Indonesia was bought by companies engaged in forestry.
United Tractors, Indonesia’s largest distributor of heavy equipment and which controls a market share of about 40 to 45 percent, targets a total of 4,200 sold units in 2014 (a five percentage point growth from the number of sold units in 2013). However, according to the company’s data, it has only been able to sell around 1,900 units in the first five months of the year (an eleven percent drop from the result in the same period last year). The company, a unit of conglomerate Astra International, said that low commodity prices burden sales of heavy equipment in Indonesia.
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