Indonesia Elevators and Escalators Market - Size and Forecast 2023-2029

INDUSTRY OVERVIEW

The Indonesia elevator and escalator market by new installations accounted for 6.6 thousand units in 2022, which is expected to reach 8.6 thousand units by 2029 growing at a CAGR of 3.96%. Increased urbanization, an aging population, rising demand for high-rise structures, adoption of green building initiatives, and the government's focus on infrastructure in key economic cities have propelled the Indonesia elevator and escalator market to new heights.

KEY HIGHLIGHTS

• Nusantara, Indonesia's new capital, spanning over a 6.6-hectare government zone, will house 184 residential building towers, which is yet to begin in Q2 2023. These residential buildings will accommodate ministries, the State Palace, the House of Representatives, and housing for some 50,000 civil servants and 500,000 residents. The project is relied on around 80% of private investment, with an investment of USD 32 billion.
• The government offers companies tax relief for 30 years and a 350% super-tax deduction for expenditure on research and development if companies tend to invest in the planned new capital city.
• Lido City, located around 60 km from the present capital, will span over an area of 30 sq.km and will be a tourism special economic zone. MNC is developing this project with an investment of USD 2 billion will comprise the construction of a movie production complex, a golf course, a hotel, a resort, and a music and arts center. Such development will support the Indonesia elevator and escalator market growth. This development was signed off in June 2021 to draw the attention of local and international tourists and engage six-seven million visitors annually in the next five years.
• Indonesia plans to invest roughly USD 430 billion in infrastructure projects by 2024-25. Housing infrastructure, services, and amenities for 500,000 units, including 50,000 apartment units, 25,000 special housing units, 1.5 million single homes, and housing infrastructure, facilities, and utilities for 1.5 million single houses are all included in the project.
• In the regions of Jakarta metropolitan area, commonly referred to as Jabodetabek (which encompasses Jakarta, Bogor, Depok, Tangerang, and Bekasi), the availability of well-located affordable land is currently extremely limited. One key solution to this challenge is transitioning from traditional landed houses to multi-story homes and carefully selecting the appropriate housing typology. This shift would effectively increase the housing supply within the city.
• Hyundai Elevator announced that it is becoming a part of a government-led consortium to secure a megacity project in Indonesia, encompassing construction, mobility, and smart city solutions. The consortium, named One Team Korea, is headed by Land, Infrastructure, and Transport Minister Won Hee-ryong, with 22 companies from various industries joining forces.
• In June 2023, the president of Indonesia issued a presidential regulation ordering the construction of a VVIP airport at the intended site of the country's new capital, Nusantara, in East Kalimantan. The Public Works and Housing Ministry has been granted the authority to carry out the project, while the Transportation Ministry will be responsible for the airport's operations. The VVIP airport will be dedicated to government business in the new capital city (IKN) and has attracted interest from investors in South Korea, Japan, and India. The airport is planned to be situated approximately 10 to 15 kilometers from the center of IKN, and construction is expected to commence in May or June 2023.
• The recent building collapses in the region have highlighted the need for improved regulation and enforcement to ensure seismic safety. To address this concern, the Minister of Public Works and Public Housing has mandated that earthquake-related buildings adhere to earthquake-resistant building standards in 2022. Given the occurrence of earthquakes approximately every 20 years, it is imperative that these structures are equipped with the necessary safety measures. In November 2022, the Indonesian president pledged to rebuild the more than 56,000 damaged homes, emphasizing their construction to be earthquake-resistant.

Government Focuses on Increasing Foreign Property Investment in Indonesia to Boost Demand for the Installation of Elevators

• As of 2022, Indonesia had plans to introduce a long-term residency visa program to attract foreign investors, especially those interested in capital and property investment, including individuals from mainland China and Hong Kong. This initiative aims to encourage foreign capital inflow and boost the property industry in the country, positioning Indonesia as an attractive destination for foreign investors.
• Currently, only 1% of Indonesia's annual new homes meet the criteria for green housing. The government has taken some steps towards promoting green construction by mandating green certification for multi-story commercial and residential buildings that meet specific standards. However, landed houses, which constitute 88% of the government's Public-Private Partnership Socialized Housing (PSR) program, are exempt from the green building requirements set forth by the Green Building Certification program launched in 2021.

Governments Efforts to Expand Infrastructure Across the Nation to Increase Demand for New Installations

• In 2022, local and provincial governments allocated approximately IDR95 trillion (~$6.3 billion), equivalent to about 10% of their budget, for capital expenditures. This investment aims to enhance and develop local infrastructures, driving the transformation of at least 100 cities in Indonesia into Smart Cities by 2045.
• Indonesia's National Medium Term Development Plan 2020-2024 accelerates the development of downstream mining, oil, gas, and copper industries. Various industrial projects like Teluk Bintuni Industrial Zone and Batulicin Industrial Zone are underway. Thus, increased spending on these industries would drive demand for industrial elevators in Indonesia's elevator and escalator market.
• Phase 2A of the Mass Rapid Transit (MRT) Jakarta is underway and expected to be completed between 2027 and 2028. The estimated cost of the Jakarta MRT project, including electrical and mechanical systems and rolling stock, is at least $1.7 billion PT MRT Jakarta (Perseroda) has set a target to finish the construction of Phase 2, which spans 11.8 kilometers from Bundaran HI to West Ancol, by 2028 with an investment of Rp32.5 trillion(~$2.2 billion). It will have nine underground stations and one depot. Additionally, PT MRT Jakarta (Perseroda) has plans to develop Phase 3 of the Ujung Menteng to Kalideres line, covering a distance of 31 kilometers, with an investment of Rp55 trillion(~$3.6 billion). Furthermore, Phase 4 of the Fatmawati to Taman Mini Indonesia Indah (TMII) line, spanning 12 kilometers, will be developed with an investment of Rp28 trillion(~$1.8 billion).

VENDOR LANDSCAPE

• The key players in the Indonesia elevator and escalator market are KONE, Mitsubishi, TKE, Hitachi, Hyundai Elevator, OTIS, Fujitec, Schindler, CANNY, and KOHLER.
• The top five prominent vendors include KONE, Schindler, Mitsubishi, and Hitachi, with Mitsubishi and Schindler holding a 45% share of the Indonesia elevator and escalator market. In March 2022, the development of One Avenue Batam will take place in two stages. The initial phase will consist of five apartment towers, each comprising 16 floors, was launched in 2022. The second phase will involve the construction of four towers, with heights ranging up to 20 floors. The overall construction timeline for the project is set for ten years. Schindler has been chosen to provide vertical transportation solutions for development.
• In March 2019, PT Berca Schindler Lifts (BSL) announced its expansion into Central Java by opening a fourth branch in Yogyakarta. After almost 20 years of serving Indonesian customers, BSL sets its commitment to offering vertical transportation solutions and reinforces its goal of becoming the region's leading lift and escalator provider.