Analysis

Hydro potential: A growing focus on diversifying the energy mix
OBG
plus

As Indonesia becomes reliant on foreign imports for its petroleum needs, with annual government energy subsidies of Rp200trn ($20bn), the need to commercialise cheaper domestic power sources is becoming key for the country’s economic development. By far the most inexpensive solution in terms of cost per KWh of electricity delivered is hydropower, which currently supplies 10% of the country’s electricity…

Analysis

No stone unturned: Exploration for new resources mitigates other supply challenges
OBG
plus

The country’s reliance on natural gas, needed to play an increasing role in meeting both its own energy needs as well as its continued use as a cash-generating export, leaves little doubt that the country will need to use any and all means available in securing new domestic supplies. While there are still substantial amounts of conventional areas to explore throughout the country, recent advances…

Analysis

The price is right: Subsidies for petrol have been costly, but removing them presents new challenges
OBG
plus

With a population of some 240m citizens, Indonesia has long been burdened by the conundrum of providing relatively inexpensive energy to its population at large while at the same time maintaining domestic purchase prices of oil and gas high enough as to remain attractive for upstream operators to continue to search out and exploit domestic reserves. Caught in the middle of these diverging price points…

Analysis

Trade winds: Hydrocarbons receipts continue to fill state coffers
OBG
plus

Oil and gas commercialisation has been a linchpin of Indonesia’s economic development for more than three decades, accounting for as much as 80% of the country’s annual exports and 70% of its annual revenues since the 1970s. While the country’s economy has expanded and diversified over time, aided by the inflow of foreign currency derived from oil and gas exports, energy exports still provide…

Analysis

A vital role: The equipment market is expanding along with the economy
OBG
plus

With a number of infrastructure projects being rolled out in the coming years, alongside overall real estate expansion and economic growth, the construction equipment sector has a vital role to play in Indonesia’s future development. Indeed, the value of the construction equipment market doubled between 2008 and 2013 – with Research and Markets analysts recently predicting a compound annual growth…

Analysis

In high demand: Building materials are seeing investment and capacity expansion
OBG
plus

As Indonesia’s real estate market has experienced growth in recent decades, the demand for building materials has skyrocketed. The domestic market is thriving, with Indonesia’s key players rapidly expanding production capacity of high-demand materials such as concrete and metals. Inflation is high for imported building materials and infrastructure challenges make transporting materials logistically…

Analysis

Ready or not: ASEAN integration will challenge the domestic construction sector
OBG
plus

With the implementation date of the ASEAN Economic Community (AEC) set for December 31, 2015, Indonesia’s construction sector must take the right steps to ensure that it stays in the running. The AEC aims to create a single market and production base with free movement of goods, services and skilled labour. Such a development will enable greater access for foreign competitors looking to enter the…

Analysis

Building up metals processing: New policies help the sector advance
OBG
plus

Indonesia has long pushed to move more of its industrial processing onshore to both protect and encourage local manufacturing. At first, efforts to rectify the situation were inconsistent. Regulations were passed but not applied, or loopholes were built in that seemed to water down what at first appeared to be draconian measures. When Indonesia successfully intervened in the markets, as it has done…

Analysis

A new asset class: Underdeveloped so far, REITs have plenty of potential
OBG
plus

Since real estate investment trusts (REITs) were given the legislative green light in 2007, Indonesia’s real estate market has boomed. With annual price increases that have regularly been among the world’s highest, coupled with heightened investor interest and a track record of strong economic growth, there has also been a widespread expectation that real estate could become a major asset class…

Analysis

Go east: Opportunities are expanding on the island of Bali and beyond
OBG
plus

One of the fastest growing real estate regions within Indonesia in recent years has been east of Java – the residential, resort and hotel market on the island of Bali. Today, however, there are signs of a push even further afield – to islands in the south- and north-eastern parts of the country that have previously been off the international real estate radar. This expansion, driven by demographic…