Overview of Indonesian Construction Equipment Market-September-2012

Off-Highway Research
THE CONSTRUCTION EQUIPMENT INDUSTRY IN INDONESIA

SEPTEMBER 2012
CONTENTS PAGE
INTRODUCTION 1
SUMMARY OF MARKET ANALYSES 3
POLITICAL AND ECONOMIC HISTORY 14
GEOGRAPHY 25
FORECAST ASSUMPTIONS 28
CONSTRUCTION, MINING, FORESTRY AND AGRICULTURE 36
EQUIPMENT ANALYSES
 MOBILE CRANES 48
 MINI EXCAVATORS 56
 HYDRAULIC EXCAVATORS 61
 CRAWLER DOZERS 76
 CRAWLER LOADERS 85
 WHEELED LOADERS 86
 BACKHOE LOADERS 96
 SKID-STEER LOADERS 101
 ROUGH TERRAIN LIFT TRUCKS 105
 MOTOR GRADERS 109
 MOTOR SCRAPERS 114
 DUMP TRUCKS 116
 COMPACTION EQUIPMENT 125
 ASPHALT FINISHERS 135
 MOBILE COMPRESSORS 139
 AGRICULTURAL TRACTORS 145
MANUFACTURER PROFILES PAGE PAGE

 PT CATERPILLAR INDONESIA 153  PT KOMATSU INDONESIA 160
 PT HITACHI CONSTRUCTION 156  PT SAKAI INDONESIA 165
MACHINERY INDONESIA  PT SUMITOMO S.H.I. INDONESIA 167
DISTRIBUTOR PROFILES
 PT ALTRAK 1978 171  PT OSCAR MAS 187
 PT ATLAS COPCO INDONESIA 173  PT PROBESCO DISATAMA 189
 PT DAYA KOBELCO 175  PT SATRINDO MITRA UTAMA 191
 PT EQUIPINDO PERKASA 177  PT SWADAYA TRAKTOR ADIPERKASA 193
 PT GAYA MAKMUR TRACTORS 178  PT TRAKINDO UTAMA 195
 PT HEXINDO ADIPERKASA Tbk 181  PT TRAKTOR NUSANTARA 198
 PT INDOTRUCK UTAMA 184  PT UNITED TRACTORS Tbk 200
© Off-Highway Research. Contents confidential to the Client.

THE CONSTRUCTION EQUIPMENT INDUSTRY IN INDONESIA

SEPTEMBER 2012
INTRODUCTION
This report on the construction equipment and agricultural tractor industries in Indonesia is one
of a series produced by Off-Highway Research, and is an update of a study on the country
published in September 2010.
It took some 10 years after the 1997 Asia Financial Crisis for demand for new construction
equipment to resume its importance. In that period China’s economy became ever stronger and
there was a long period of world economic prosperity that came to an end in 2008. After the
outbreak of the crisis, universally identified in the region as the time of the Lehman Bros.
collapse, Asia proved to be much quicker to recover than other regions. In Indonesia,
specifically, after a nervous year in 2009, sales of construction and mining equipment grew again
strongly in 2010 to 2012.
The aim of this report is to present an accurate overview of the development of the various
construction equipment sectors in Indonesia since 2007. Growth has been the theme of most
trends since 2002, with the economy becoming stronger every year until 2008-2009. There are
once again grounds for greater optimism for the future and sustained growth in the construction,
mining and forestry equipment markets, although the world economy has had a dampening effect
on demand in 2012.
Following an initial period of desk research, an in-depth field research programme was
undertaken in Indonesia during July 2012. Interviews were carried out with the local
manufacturers and the most significant importers and distributors of construction equipment.
Off-Highway would like to thank all those who contributed their opinions, data and time which
have been invaluable to the production of this report.
The report follows the normal format of an Off-Highway Research Multi-Client Study, which
has been developed with an emphasis on clarity. The coverage of the report is organised as
follows:
 The first section includes important topics of a general background nature, such as political
and economic history, economic activity and the present situation and prospects for the
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construction, mining and forestry industries. The conclusions of these topics apply to all the
product areas and are not, therefore, repeated in each analysis.
 The second section covers 16 machinery sectors. For each category the following
information is given:
– Market Size and Trends, 2007-2011

– Domestic Production, 2007-2011
– Component Sourcing, 2012
– Exports
– Market Shares, 2007-2011
– Population of Machines and End-Users, 2012
– Sales Forecast, 2012-2016
– Machines Available, 2012
 The third section consists of profiles of the five domestic manufacturers of construction
equipment analysed in the earlier sections, with details under the following headings:
 Address  Product Range

 Key Personnel  Production
 Background  Component Sourcing
 Turnover  Distribution
 Employees  Exports
 Manufacturing Facilities  Future Developments
 The final section includes comprehensive profiles of leading suppliers of construction

equipment, with details given under the following headings:
 Address  Franchises
 Key Personnel  Outlets
 History  Sales
 Turnover  Future Developments
 Employees
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SUMMARY OF MARKET ANALYSES
This section summarises the statistics and trends of the 17 product lines to be found in the
individual Equipment Analyses which follow in the main section of the report.
Sales
Table 1. Indonesia: Sales of Construction Equipment and Agricultural Tractors

by Type, 2007-2011
(Units)
2007 2008 2009 2010 2011

Mobile Cranes 29 100 46 49 68
Mini Excavators 5 23 80 135 130
Wheeled Excavators 5 5 5 5 3
Crawler Excavators 4,350 6,528 4,882 8,012 12,800
Crawler Dozers 1,377 1,759 1,054 1,891 2,851
Crawler Loaders 10 10 2 - -
Wheeled Loaders 373 550 416 658 1,155
Backhoe Loaders 205 279 190 284 388
Skid-Steer Loaders 80 66 20 50 70
Rough Terrain Lift Trucks 19 21 22 38 61
Motor Graders 390 586 395 629 1,101
Motor Scrapers - 2 2 - -
Dump Trucks 520 1,233 982 1,533 2,519
Compaction Equipment* 445 833 518 929 1,326
Asphalt Finishers 5 2 2 6 11
Mobile Compressors 265 280 282 305 315
Total Construction Equipment 8,078 12,277 8,898 14,524 22,798
Agricultural Tractors 1,300 1,590 1,300 1,925 2,182
* Ride-on types only

Source: Off-Highway Research
The slow recovery of the market after the Asian financial crisis, which overwhelmed the ASEAN
region in 1997, gathered pace in 2004. The main drivers have recently been coal mining,
forestry and plantation agriculture, especially that of the oil palm. Before 2011 public works of
any scale have been notable by their absence, although demand related to housing and
commercial buildings was strong from 2004 to 2008 and was back again 2011.
2008 was the first peak year, with massive sales of hydraulic excavators, dump trucks and
mining dozers being registered. Then came the collapse of Lehman Bros. and the world
economic crisis. Indonesia proved to be one of the most resilient economies. Its banks did not
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have oversized commitments and the construction equipment market, while slow during 2009,
did not collapse. The continuing investment associated with coal exporting, the promotion of
Indonesian coal as an energy source for the country itself, the establishment of oil palm
plantations and the export of timber all supported a trend that ended up producing a milder fall in
demand than that seen elsewhere, followed by a quick recovery. By the second half of 2009
demand was picking up, so the declines seen for 2009 as a whole were not too serious. 2010
showed a rapid recovery and 2011 was a truly marvellous year for construction equipment sales,
although the end destinations were actually in many cases mining and plantation agriculture.
Both of these applications were at the stage of opening up, needing machinery to clear away the
forests, remove overburden in the mines and set up fields and drainage for the young oil palms.
Sales records were beaten in most products in 2011.
The crawler excavator has held its lead as the ‘work horse’ of the construction equipment market,
accounting for around 56 per cent of all units sold in 2011 (55 per cent in 2009 and 48 per cent in
2006). Operators and contractors tend to use the crawler excavator as an all-purpose machine,
whereas in other world markets a wheeled loader or backhoe loader might be used. Crawler
dozers are in second place in terms of volume of sales. Together, crawler excavators and crawler
dozers accounted for nearly 70 per cent of all mobile construction equipment units sold in 2011.
Mobile Cranes: In 2007 Chinese cranes arrived in the market in unheard of numbers and
recorded impressive results. They had a phenomenally successful year in 2008, but sales of the
truck-mounted types fell away again quite rapidly in 2009. Results in 2010 and 2011 show that
there is still some demand for them but it is the crawler types that have really changed the
market, with sales around 20 units each year.
Mini Excavators: This product has been virtually unknown, due to the abundance of cheap
labour. Success came at last in 2009 when one supplier targeted central Kalimantan, where the
population is sparse but corporations are keen to develop plantations. It offers the 4.6 tonne
machine to clear the ground round the palm trees and to make access roads for harvesting.
Hydraulic Excavators: Dominated by 20 tonne models, almost 100 per cent of demand is for
crawler machines. Sales peaked first at 6,500 units in 2008, and then continued to set records in
2010 and 2011.
Crawler Dozers: After 2006 the expansion of coal mining and the opening up of oil palm
plantations caused a surge of demand, to reach a peak in 2008. The decline of 2009 was
somewhat worse than in hydraulic excavator sales but in 2010 all of it was cancelled out and
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2011 reached record heights, especially in the favoured sizes of 18 to 30 tonnes. The key to
crawler dozer demand now is the ever increasing requirements of the coal mining industry in
Sumatra, and particularly in Kalimantan.
Crawler Loaders: The market for crawler loaders has almost disappeared entirely.
Wheeled Loaders: The concept of the wheeled loader took some time to become established
and the market remains small, because of the problem of working in an extremely wet climate.
Sales of wheeled loaders as a whole have gone quickly from 180 in 2006 to 550 in 2008,
followed by a predictable cooling-off in 2009. Chinese exports moderated in 2009 but came
back in 2010 and were higher than ever in 2011. Of the loaders sold in 2011, 450 of them were
Chinese, 700 were ‘full price’ products. The movement of massive amounts of coal to the ports
and in them is coupled with the increased confidence of the quarries and cement works to invest
to give a big surge in demand.
Backhoe Loaders: The market for backhoe loaders is quite small and is not developing
strongly, mainly due to the ubiquitous crawler excavator, available from low-cost operators at
very competitive daily hire rates. Since 2009 progress has been good, thanks to efforts to sell the
machine to companies opening up oil palm plantations. By 2011 general construction was also
making a contribution, so that sales were twice as high as in 2009.
Skid-Steer Loaders: The volume of sales remains disappointingly low. The main applications
are in the agricultural sector, for loading materials such as rice husks (a major source of cooking
fuel), palm oil kernels and other agricultural by-products.
Rough Terrain Lift Trucks: The concept has not taken hold but there are instances such as
machinery maintenance in the mines, plantation agriculture and the oil industry, where they have
found a niche.
Motor Graders: In 2008 the market reached record levels, thanks to heavy forestry activity and
an expansion of investment by mining contractors. 2009 was a quieter year, with sales down by
a third. They recovered very well in 2010, with sales to mines reaching 300 units. Mine sales
continued into 2011 at a fast pace, although at the same time sales to the plantations were very
good and formed another of the major factors behind the record sales.
Motor Scrapers: Sparse demand with no sales since 2009.
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Dump Trucks: Since 2005, demand for dump trucks has soared. The first peak in 2008, at
1,233 units happened paradoxically when coal production was falling and the mining industry
was showing no overall growth. Strong growth returned in 2010 and by 2011 a record sales level
was reached. There was a massive rush to invest in productive machinery, so rigid trucks
jumped by 64 per cent and articulated dump trucks by a little more, 66 per cent.
Compaction Equipment: Self-propelled rollers in the 9-11 tonne category are produced locally
and account for more than half of demand. Their sales have gone so well since 2006 because of
the huge expansion of private roads in plantations, forests and mines.
Asphalt Finishers: Demand for asphalt finishers is directly related to road building and repair.
Very little new road building has taken place in the last five years, so all the machines sold have
been devoted to repair work.
Mobile Compressors: In this decade, unit sales have not returned to the heights of the 1990s
and peaked at 300 units in 2004. They then tended to fall and stabilise at around 280 units a
year. The main end-users are in the mines, quarries and ports.
Agricultural Tractors: Tractor sales increased in every year from 2003 to 2008, thanks to
rising agricultural prices, especially palm oil. After a dip in 2009 they have continued to rise. 60
per cent of all new tractors go to oil palm plantations, 25 per cent go to work on sugar estates,
and the rest in forestry, logging and other areas of agriculture. The most popular size of tractor,
accounting for 60 to 65 per cent of demand, is in the 80-99 horsepower range. However, there is
a trend to larger tractors over 100 horsepower for sugar cane transport.
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Table 2. Indonesia: Suppliers of Construction Equipment and Agricultural Tractors and Their Market Shares, 2011
(Units)
Mobile Mini Hydraulic Crawler Dozers Wheeled Backhoe Skid-Steer Motor Graders Dump Asphalt Compaction Mobile Agricultural
Cranes Excavators Excavators & Loaders Loaders Loaders Loaders RTLTs & Scrapers Trucks Finishers Equipment Compressors Tractors
Airman 90
Ammann 10
Atlas Copco 125
Bobcat 27
Bomag 208
Case 15 110 20 20
Caterpillar 14 1,300 760 198 55 10 13 320 679 4 120
Deere 19 10 6 608
Doosan 650 1 20
Elgi 40
Grove 3
Hamm 90
Hitachi 7 2,550 35 36
Hyundai 21 780 10
JCB 82 143 8
Kawasaki 60
Kobelco 75 1,950
Komatsu 13 4,400 2,000 280 544 1,294
Kubota 221
Link-Belt 6
LiuGong 18 7 152 5 15 15
Manitou 40
Massey Ferguson 423
Mitsubishi 107
New Holland 5 5
Sakai 794
Sany 17
Shantui 35
Sumitomo 370
Tadano 5
Terex 60 4
Vögele
Volvo 600 45 19 476 54
XCMG 28 110 20
Xiagong 30 130 50 32
Others 12 100 119 8 30 5 3 40 250
Total 68 130 12,800 2,851 1,155 388 70 61 1,101 2,519 11 1,326 315 2,182
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Production
Import tariffs have declined in recent years to five per cent on most items, which has perhaps
persuaded some manufacturers to stabilise, rather than expand their local production. However,
Hitachi and Sakai are continuing to invest and planning to increase production, in line with the
expected rise in domestic demand. The main factor that has brought production from 3,000 units
in 2005 to nearly 10,000 in 2011 is growth in the local market but there has been some
encouragement from the regional ASEAN demand.
Table 3. Indonesia: Production of Construction Equipment by Type, 2007-2011

(Units)
2007 2008 2009 2010 2011

Crawler Dozers 996 1,530 590 1,420 2,150
Dump Trucks 150 400 350 700 1,100
Compaction Equipment 600 850 400 779 759
Motor Graders 170 270 - - -
Total 5,137 7,080 4,519 7,719 9,769
There are five domestic manufacturers of construction equipment: Komatsu, Caterpillar, Hitachi
and Sakai, and recently arrived, Sumitomo. Production was exceptionally high in 2007 and 2008
but fell back in 2009. Since then it has more than doubled and is higher than ever.
Crawler Excavators: The three manufacturers, Komatsu, Hitachi and Caterpillar are producing
more than ever before. Hitachi currently produces around 2,500 units per annum but plans to
double the volume by 2015. Komatsu has doubled production since 2009 because of orders from
its local dealer, but appears to be taking the emphasis away from final machine assembly in
favour of more component production. Caterpillar suspended production of its 20 tonne model
in 2008, only to reinstate it in 2010. The 2010 production restored the throughput to the former
levels and output grew well in 2011.
Inevitably, there are always possible alternatives to producing inside Indonesia, with Thailand
being favoured currently by Komatsu and Kobelco for expansion of their production capacity.
China is a possibility for Caterpillar, while Japan is an obvious alternative for all the three local
producers if they wish it. The local industry has a problem with engines, since most buyers want
8
no more than Tier 2 because of the poor fuel quality they have to suffer, whereas regional and
Asian markets are moving further on emissions controls.
Crawler Dozers: Komatsu is now the only producer, Caterpillar having stopped production in
April 2012. Komatsu output declined in 2009 but deliverance came in the form of the expansion
of the coal industry, with sales both to the plant’s part owner and to third parties. Sales doubled
in 2010 and added a third in 2011.
Compaction Equipment: Sakai is the only manufacturer, building a 10.5 tonne soil roller. The
output level depends on the fortunes of the local market. Demand has been healthy since a poor
year in 2009. A new model for selling worldwide has just arrived.
Motor Graders: Caterpillar ceased producing graders locally in 1999, Komatsu in 2008.
Population
Table 4. Indonesia: Population of Construction Equipment and Agricultural Tractors

by Type, 2012
Units
Mobile Cranes 1,000
Mini Excavators 450
Wheeled Excavators 50
Crawler Excavators 41,950
Crawler Dozers 17,000
Crawler Loaders 400
Wheeled Loaders 7,000
Backhoe Loaders 1,700
Skid-Steer Loaders 350
Rough Terrain Lift Trucks 230
Motor Graders 3,300
Motor Scrapers 100
Dump Trucks 8,200
Compaction Equipment* 3,000
Asphalt Finishers 170
Mobile Compressors 2,500
Total Construction Equipment 87,400
Agricultural Tractors 13,000

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There has been a dramatic increase in the number of mobile construction machines in the country
in the last two years. Around 25,000 new units have been added, going mostly to the mines, the
new plantations and into forestry work.
Mobile Cranes: The largest population is crawler cranes, working in the logging, oil and
construction industries. Significant numbers are used in mining for clearing forests in
preparation for removal of overburden. Mobile truck cranes are mainly used in the major cities
and in ports for loading and unloading of barges and coastal vessels.
Rental is significant in the urban areas but companies from Singapore are very active in this area,
particularly for the larger crawler cranes (over 100 tonnes) used in lifting of heavy machinery.
Mini Excavators: Most of the population is working in the plantations, being the machines sold
since 2008.
Hydraulic Excavators: The working population has risen very fast, from 20,000 in 2006 to
42,000 by the beginning of 2012. The largest user is general contracting, which employs a wide
variety of machines, with the largest group being the 12 and 20 tonne types. Mining may well
overtake it soon, employing large numbers in the hands of sub-contractors and small mine
operators.
Crawler Dozers: Popular for driving basic roads (mostly without tarmac), to clear forest for
plantation agriculture and in mining. The boom in oil palm plantations has been a particular
boost to sales in the last five years, as has the doubling of capacity in the coal mines.
Crawler Loaders: Crawler loaders are rarely used but survive in logging, quarrying and heavy
construction work. They are also used in water irrigation projects.
Wheeled Loaders: The largest use is in quarries, for the loading of aggregates and sand, in
concrete batching plants and in ports and transport depots for the loading and unloading of bulk
materials. The palm oil industry uses them at several stages, as do other farming processes (rice,
cassava and sugar).
Backhoe Loaders: Most machines are working in the agricultural sector, with oil palm
plantations being the largest single end-user. Drainage and water management schemes are in
second place, then local authorities.
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Skid-Steer Loaders: Very sparsely used, but in farming they have found some applications in
mushroom growing and oil palm plantations; in industry to feed fuel into boilers; and in
construction to clean up sites after road repairs.
Rough Terrain Lift Trucks: A population of no more than 70 units of masted machines and
160 telescopic handlers. The main applications are in the mining and oil industries and in
agriculture.
Motor Graders: The majority are working for Highway and Public Works Departments on road
maintenance duties, particularly small rural roads made from compacted dirt. The main reason
for the recent increase in sales, however, has been demand from the oil palm estates and mining
contractors.
Dump Trucks: The population has increased dramatically in the last 10 years, while the number
of rigid trucks has tripled in the last five years alone. The population of articulated dump trucks
has almost tripled since 2005. The mining industry accounts for over 90 per cent of trucks sold
over the last decade. The cement industry is the second largest end-user, followed by quarrying.
Mobile Compressors: The main application is in the mines, for rock drilling and on service
trucks. The rental segment is very small and tends to offer ancient machines that give it a bad
name.
Forecast to 2016
From the end of 2009 to mid-2012 there has been a stampede of investment in new construction
equipment, led by the mining and plantation industries. Both were at the stage of needing the
machines to open up their operations and eventually will need less machinery and different kinds
for the operation of their production assets.
Therefore one has to assess what will happen now that the surge to 23,000 unit sales is already
history, when the last Off-Highway Research report did not even predict such sales by 2014. On
the positive side there is the prospect of GDP growth of upwards of 5.5 per cent per annum to
2014, and real growth in construction activity in the same time frame of six to eight per cent.
The aim to double palm oil production might not be exactly realised but that sector is in any case
growing fast and will need a lot of machinery to establish and maintain its plantations. Mining,
especially coal for export to China, will continue to absorb large numbers of machines of all
types. In all probability the coal price will even out by 2013 and no longer be a disincentive.
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The biggest question mark is over public works, a sector much afflicted by corruption. In the
long term the country risks having no competitive infrastructure and living simply from
emptying its mineral wealth into ships bound for foreign ports.
Table 5. Indonesia: Forecast Sales of Construction Equipment and Agricultural Tractors

by Type, 2012-2016
(Units)
2012 2013 2014 2015 2016

Mobile Cranes 83 105 115 125 135
Wheeled Excavators 5 5 5 5 5
Crawler Dozers 2,700 2,500 2,300 2,500 2,500
Crawler Loaders - - - - -
Wheeled Loaders 1,200 1,400 1,600 1,800 1,800
Rough Terrain Lift Trucks 50 60 70 80 80
Motor Graders 800 650 600 550 500
Motor Scrapers 2 1 1 2 2
Dump Trucks 2,200 2,400 2,500 2,500 2,800
Compaction Equipment* 960 1,115 1,120 975 955
Total Construction Equipment 21,915 23,776 24,481 25,927 27,267
Agricultural Tractors 2,200 2,500 2,800 3,000 3,500

Mobile Cranes: The prospect of the next few years enjoying high growth is very positive for
cranes. Construction will need them, particularly if the toll roads are built, the cement industry
does make its investments and the private sector holds its nerve. Mining investment will be very
supportive.
Mini Excavators: Modest possibilities, given that the cheap labour supply is not disappearing at
all. For sales volumes to grow very much in today’s market conditions would require an
improbable coincidence of expanding oil palm areas and their occupation by owners/operators
who would rather use mini excavators than manual labour for groundwork.
Hydraulic Excavators: After a small rise in sales in 2012 growth should resume. Recovery in
the demand for and price of several main commodities such as crude palm oil and coal, as well as
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better conditions of financial liquidity should help, as will the very positive trend in GDP growth
for the next five years points.
Crawler Dozers: As with the excavators, work in plantations, mines and forestry will all
combine to sustain a high market level.
Crawler Loaders: Work clearing land for mining will sustain this small niche market for the
foreseeable future.
Wheeled Loaders: The forecast shows steady progress in sales, thanks to economic growth.
Chinese products will come in at lower prices, in which case the forecast may need to be uplifted
slightly.
Backhoe Loaders: The forecast is relatively optimistic but given the low cost of labour and pre-
eminent position of excavators in the minds of owners and operators, the market is unlikely to
explode. The major players in the construction equipment market still see it as a small product
with doubtful potential.
Skid-Steer Loaders: The market will remain small and limited in scope, because of the low
cost of manual labour. Most suppliers will be concentrating on the market for bulk materials in
industry.
Rough Terrain Lift Trucks: No great potential to expand, given the number of alternative
solutions available, from low-cost used fork lift trucks to low-cost manual labour.
Motor Graders: The market is unlikely to grow substantially in the next few years, but rather to
cool off. Mining, agriculture and forestry will continue to underpin the market and provide the
demand of the next few years but not so exuberantly as in 2010 and 2011. If and when the
government decides to allocate substantial funds to improve the poor road network, then some
uplift can be expected.
Motor Scrapers: In many areas the ground conditions are not suitable for motor scrapers but
there will be demand for a small number of machines each year.
Dump Trucks: The huge sales seen in 2011 must subside. The articulated type should sustain a
demand of around 700 to 800 units per annum. It is even possible that its popularity may well
13
grow. Rigid dump truck demand can stay as high as 1,700 units. The coal price should stabilise
by 2013, and China’s energy needs will make a ready market for Indonesian coal.
Compaction Equipment: The forecast shows increases in the sale of asphalting machines, with
a return of the 8 to 10 tonne tandem for new road construction. The soil roller market will stay at
a high level, used by the oil palm industry, forestry and open cast mines.
Asphalt Finishers: The forecast assumes that new road construction will once again return,
with a priority on the missing sections of the trans-Java road. Eight new toll routes of about
500 kilometres should be built during the next five years.
Mobile Compressors: Short term sales are going very well. The economic background is
favourable and both the mining and construction industries are willing to invest. The market
could grow by 10 to 20 per cent. Over the following four years the best hope is mining.
Agricultural Tractors: The forecast for sales of agricultural tractors reflects the favourable
outlook for oil palms and sugar. Farming for food will still be a very small part of the demand.
Very few farmers can afford tractors, and such is the outlook for many years to come.
POLITICAL AND ECONOMIC HISTORY
Political History
The Indonesian peoples have been influenced from the earliest date by Indian and to a lesser
degree Chinese culture. Hindu traders from south India arrived in the early centuries AD;
Chinese traders came in the 4th century AD. Buddhism was well established by the 7th Century
AD when the kingdom of Sriwijaya flourished on eastern Sumatra until the 14th century. A
similar port-based state, Majaphit was also powerful after it. Islamic traders arrived from Arabia
around 700 AD but it was not until the 13th century that a first Muslim ruler appeared, in
Lamrah.
The First Dutch explorers arrived in 1596; at first they were solely interested in trade and
interfered with the local rulers only when their commercial interests were threatened. This
policy led gradually to the occupation of the Moluccas and most of Java. The Netherlands East
India Company, founded in 1602, took over complete control of the islands’ trade and
maintained this until 1800 when the company was declared bankrupt and the Dutch government
took over its functions. Dutch interest remained basically commercial and concentration was on
14
export crops such as cloves, coffee and sugar. This was temporarily stopped during the
Napoleonic wars and during 1811-1816 when the islands were occupied by the British.
However, Dutch government was restored in 1830 and to make the colony profitable it
introduced the Cultivation System. The peasant of Java were obliged to grow export crops
(coffee, tea, sugar, tobacco and indigo), paying their rent in crops and forced to sell the rest of the
harvest to the government at fixed prices. Eventually this system, which produced corruption,
poverty, famine and the destruction of rice-growing land, gave way to more conventional
plantation agriculture. The Dutch did bring railways, improved roads and ports, however, during
the 19th century. Their rule continued uninterrupted until 1942, when the country fell under
Japanese occupation.
After the surrender of Japan in August 1945, the Nationalist leaders proclaimed Indonesia
independent within two days but in the following year a big Dutch military force arrived and it
was not until 1949 that the Dutch bowed to the inevitable and transferred sovereignty on
27th December. Indonesia finally took control of Dutch New Guinea in 1963.
Dr Sukarno, the first President of the Republic, was at first a democrat and held elections finally
in 1955. In the following year he visited China and became convinced that a more appropriate
system of government would be to imitate the village tradition of consensus through discussion.
Guided Democracy was supposed to operate through a coalition of the military, religious groups
and the communists. In the end Sukarno established himself as virtual dictator, obtaining mass
support by a policy of extreme nationalism. However, his economic policies were disastrous and
hyper-inflation ensued. An attempted coup in 1965 resulted in General Suharto of the Strategic
Reserve taking over the Army and suppressing the rebellion. The massacre of at least 100,000
suspected communists ensued; in all, around half a million people lost their lives. Continuing
inflation and widespread corruption led to opposition from students, the army and Muslim
groups, so that between 1966 and 1968 Sukarno’s powers were gradually reduced and transferred
to General Suharto, who became president in 1968.
Suharto was a wily survivor who lasted until in power until 1999 and died only in 2008. Whilst
he retained the trappings of democracy, real power passed from parliament and cabinet to a small
group of army officers and to the Kopkamtib, the security organisation. The soldiers minimised
political activity and suppressed left-wing movements, Islamic radicals, and separatist rebels in
Aceh, Papua and East Timor. Suharto’s New Order created a strange fake democracy, so that in
the 1971 elections he allocated more than half the seats to soldiers and his friends. More than a
quarter went to Golkar, not a party but a grouping of civil servants, soldiers, employees and
employers. Two years later all other parties were forced to merge into one Indonesia Democratic
15
Party. In 1974, however, national resentment of continuing inflation, of the dominance of

Japanese foreign capital and Chinese management of the economy and of the Indonesian elite
(the army officers and their relatives) led to rioting. The President dismissed the army advisers
and announced a return to constitutional government; at the same time, he took over command of
Kopkamtib from his chief rival, to consolidate his personal position.
Recent Political Developments
1998 brought the downfall of Suharto in the wake of the collapse of the economy and the
currency. The Vice President BJ Habibie assumed power, and then in 1999 the free elections
brought in the supremely unsuccessful blind Muslim scholar, Abdurrahman Wahid. The
assembly threw him out in 2001 and for three years power was with Sukarno’s daughter,
Megawati Sukarnoputri.
Foreign investments failed, as the country became known for corruption (Transparency
International named Suharto as the top of its all-time corruption league), abuses of power and
human rights abuses. The 2004 direct election of a new President, Susilo Bambang Yudhyono,
brought relief. Bambang dealt well with tsunami damage in Aceh and managed to edge the
military out of their business empires and scored some successes in anti-corruption trials (except
Suharto). SBY, as he is known, managed to keep the broad majority of Muslims in the political
mainstream by a stable and non-confrontational policy. In July 2009 he was re-elected as
President, in spite of two large Muslim organisations backing a different candidate. He
performed well in the crisis years of 2008 and 2009 but has appeared weak recently, as a huge
scandal affecting his Democratic Party resulted in sentencing a former treasurer to five years in
jail for corruption. His party fell to a 14 per cent approval rating in early 2012, as other members
of his government were implicated in the scandal.
Indonesia is a Republic with executive power resting with the President, who appoints a council
of ministers, who are not required to be elected members of the legislature.
The highest representative body at national level is the People’s Consultative Assembly (MPR).
Its main functions are supporting and amending the constitution, inaugurating the president, and
formalizing broad outlines of state policy. It has the power to impeach the president. The MPR
comprises two houses; the People’s Representative Council (DPR), with 560 members, and the
Regional Representative Council (DPD), with 132 members. The DPR passes legislation and
monitors the executive branch; party-aligned members are elected for five-year terms by
proportional representation.
16
Recent Economic History
Suharto’s New Order brought in a liberal market economy, backed by foreign investment and
state planning. Within three years the new regime managed to get the nation’s debt under
control. By balancing the budget and controlling the money supply, Suharto brought down
inflation and redirected resources from wasteful prestige projects to producing food and clothing
and the building of roads and harbours.
The new administration wholeheartedly adopted Western development strategies and encouraged
foreign investment with such major incentives as tax exemptions and an assurance of free profit.
With billions of dollars in Western aid and food imports pouring into the country, Indonesia
became the model of a successful developing nation.
The 1990s were a period of plenty and expanding markets. At the same time President Suharto
and his family were benefiting disproportionately from their privileged position, prompting the
accusation that the alternative name for Indonesia was Suharto Inc.
Under the lacklustre presidency of Megawati Sukarnoputri (2001-2004) the economy continued
to recover, with growth attaining around five per cent each year. Bambang Yudhyono, who
replaced her in the 2004 elections, vowed to continue economic reform.
The recovery from the crisis was remarkable. After 2005, real GDP accelerated from a rate
around 4.5 per cent per annum, to a peak figure of 6.3 per cent in 2007. There was a feeling
among politicians and industrialists that at last, the Indonesian economy was on a sound footing
for long-term growth. Then, of course, in a faraway country the sub-prime crisis exploded and in
September 2008 Lehman Bros. collapsed, a symbol of the huge crisis that then engulfed the
world economy.
2008 was a turning point. In the first half of the year growth was going very well, with high
private consumption accompanying robust volumes of investment. Then in the second half of
the year it became clear that world economies all over the globe were slowing down and
commodity prices, especially significant for this exporter of raw materials were sliding.
Investors took against the country and pulled money out of their financial portfolios. The
consequence of all these three factors was that the Rupiah lost five per cent of its value during
2008. Unfortunately inflation was high during the year. High oil prices proved to be too much
for the state’s fund that subsidised them and a huge 28 per cent increase was published in
17
May 2008. That combined with high food prices inherited from the 2007 world food price spike
to push inflation up to just below 10 per cent.
Table 6. Indonesia: Economic Growth by Expenditure Type, 2007-2011

(%)
2007 2008 2009 2010 2011

GDP 6.3 6.1 4.6 6.2 6.5
Private Consumption 5.0 5.3 4.9 4.7 4.7
Government Consumption 3.9 10.4 15.7 0.3 3.2
Gross Fixed Capital Formation 9.4 11.7 3.3 8.5 8.8
Exports of Goods and Services 8.5 9.5 -9.7 15.3 13.6
Imports of Goods and Services 9.0 10.0 -15.0 17.3 13.3
Inflation 6.2 11.1 2.8 7.0 3.8
Source: Bank of Indonesia
The global economic crisis posed major challenges for the economy from the beginning of 2009
and throughout the whole year. Uncertainties associated with how deep the global contraction
and how quick the global economic recovery would occur not only exacerbated risks in the
financial sector, but also had a negative effect on economic activity. In the first quarter of 2009
economic growth was decreasing, due to a deep contraction in exports of goods and services.
That undermined confidence among economic actors in the financial sector and real sector.
Bank Indonesia and the Government took a number of policies to safeguard macroeconomic and
financial stability, and prevent further decline in economic growth through monetary and fiscal
stimulus. These policies succeeded not only in safeguarding macroeconomic and financial
system stability, but also in strengthening domestic economic resilience, paving the way for
renewed improvement in economic activity after the second quarter of 2009, a very quick
recovery.
They used policies systematically introduced to bolster economic and financial fundamentals in
the aftermath of the 1997-1998 crisis. Overall, the Indonesian economy in 2009 was able to get
through this challenging year with the remarkable achievement of economic growth reaching
4.6 per cent, the third highest in the world after China and India. Further slowdown in economic
growth amid global economic contraction was avoided due to the predominantly demand-driven
structure of the economy. Financial markets and macroeconomic stability also improved towards
the end of 2009. In 2010 exports of raw materials staged a massive recovery and investment
improved, enabling the economy to return to a growth rate above 6.0 per cent. There was even
18
an increase to 6.5 per cent in 2011, with sustained private consumption growth backing up the
positive trends in investment and exports.
The Economy by Sector
Table 7. Indonesia: Origins of Gross Domestic Product, 2007-2011

(%)
2007 2008 2009 2010 2011

Agriculture and Forestry 13.7 14.5 15.3 15.2 14.7
Mining and Quarrying 11.2 10.9 10.5 11.1 11.9
Manufacturing 27.1 27.9 26.4 24.7 24.3
Construction 7.7 8.5 9.9 10.2 10.2
Trade and Hotels 14.9 14.0 13.4 13.7 13.8
Transport and Communication 6.7 6.3 6.3 6.5 6.6
Finance and Business Services 7.7 7.4 7.2 7.2 7.2
Services 10.1 9.7 10.2 10.1 10.5
Total 100.0 100.0 100.0 100.0 100.0
Source: Official Statistics
Indonesia sees itself as having an important agriculture industry, based on plantations. Its share
of GDP is now stable, thanks to the advance of the estates in palm oil production. The
manufacturing sector, mostly controlled by private enterprise, accounts for 24 per cent of the
economy. Oil and gas processing accounts for around six per cent of the 24 shown for industry.
The other growing parts of the economy are transport, storage and retailing.
Construction, on the other hand, still occupies quite a lowly position in the economy, given that
this is a developing country. The advance since 2007, from 7.7 to 10.2 per cent of GDP is partly
explained by severe inflation in building costs, which has pushed upwards the value of the
industry.
Industrial Output
Some of the more significant industries are portrayed in the table of output below.
19
Table 8. Indonesia: Manufacturing Value Added by Sub-Sector, 2010
Rp Bn
Food and Beverages 200,662
Tobacco 58,864
Textiles 45,441
Clothes 24,764
Leather 8,306
Wood and Wood Products 16,070
Paper and Paper Products 56,341
Publishing, Printing and Reproduction of Recorded Media 9,981
Coal, Refined Petroleum Products and Nuclear Fuel 3,244
Chemicals 131,891
Rubber and Plastics 43,721
Other Non-Metallic Mineral Products 35,026
Basic Metals 48,476
Fabricated Metal Products 28,872
Machinery and Equipment 13,146
Office, Accounting, and Computing Machinery 229
Electrical Machinery and Apparatus 23,816
Radio, Television and Communication Equipment 23,816
Medical, Precision and Optical Instruments, Watches and Clocks 2,700
Motor Vehicles, Trailers and Semi-Trailers 49,760
Other Transport Equipment 44,115
Furniture and Manufacturing 12,209
Recycling 604
Total 882,316
Source: Statistics Indonesia
The steel industry has an output of nearly four million tonnes annually. In the region, both
Malaysia and Thailand produce more.
Table 9. Indonesia: Steel Production, 2006-2010

('000 Tonnes)
2006 2007 2008 2009 2010

3,759 4,016 3,915 3,501 3,664
Source: World Steel Association
The country has an important motor manufacturing sector, although the past has two
embarrassments in it. At a time in the early 1990s when Toyota and others were already
assembling cars, the Suharto regime introduced the Timor, a supposed Indonesian car. In fact it
was a project of Suharto’s son Tommy, and was really a Korean version of the Mazda 323, made
by Kia but imported duty free. It caused the cancellation of the other embarrassment, the Maleo,
20
a national pipe-dream led at the time by BJ Habibie. The Timor project duly collapsed in 1998
in the wake of the ‘Asia crisis’.
Nowadays, matters go better with a wide spread of different vehicles being made. There are
about 20 car assemblers and 170 component suppliers, a factor that provides support for the
much smaller construction equipment sector. The industry is dominated by Toyota, which
produces 68,000 vehicles annually and Daihatsu with 111,000. Since 2010, however, annual
production of heavy trucks has exceeded 100,000 units, led by Mitsubishi Fuso, Hino and Isuzu.
Table 10. Indonesia: Vehicle Production, 2007-2011

(Units)
2007 2008 2009 2010 2011

Passenger Cars 309,208 431,423 352,172 496,524 561,863
Total All Vehicles 411,638 600,628 464,816 702,508 837,948
Source: OICA
China and India are two rising stars of the motor industry that are known to be looking at the
possibility of starting manufacturing in Indonesia. The three main truck manufacturers are
intending to raise their production capacity to 170,000 units soon, to sell output locally and
within the ASEAN region.
Employment by Sector
Table 11. Indonesia: Composition of the Labour Force, 2009

('000)
Agriculture, Forestry, Hunting and Fishery 43,029

Mining and Quarrying 1,139
Manufacturing Industry 12,615
Electricity, Gas, and Water 209
Construction 4,611
Wholesale Trade, Retail Trade, Restaurants and Hotels 21,837
Transportation, Storage, and Communications 5,948
Financing, Insurance, Real Estate and Business Services 1,485
Community, Social, and Personal Services 13,611
Total 104,485
Source: National Labour Force Survey
21
Indonesia is still largely a rural economy, although the productivity of agriculture is low enough
to mean that the more than 35 per cent of the workforce engaged in it creates only 14 per cent of
the value added in the economy. With population still growing at 1.49 per cent annually, it is
vital that the number of jobs should increase. Since 2005 employment in mining has grown by
25 per cent, a remarkable achievement; but that of the construction industry has grown by only
one per cent.
Prices
Table 12. Indonesia: Consumer Price Inflation, 2007-2011

(Per Cent)
2007 2008 2009 2010 2011

6.2 9.8 2.8 7.0 3.8
Source: Bank of Indonesia
Inflation has been a severe problem in recent years. To implement monetary policy, Bank
Indonesia (BI) has opted for a working framework known as the Inflation Targeting Framework
(ITF), formally adopted in July 2005. Under this framework, Bank Indonesia explicitly
announces the government-set inflation target to the public and monetary policy is geared
towards achievement of this target. For the inflation target to be reached, monetary policy is
implemented with a forward-looking approach, meaning that any change in the monetary policy
stance is undertaken after evaluating whether future developments in inflation are on track with
the established inflation target.
The inflation target is the level of inflation that must be achieved by Bank Indonesia in
coordination with the Government. Under the Bank Indonesia Law, the inflation target is
established by the Government. In 2010 there were steep rises in the price of food and fuel; in
the first half of 2011 the food price rises continued but Bank Indonesia took corrective action by
raising its BI Rate. Then the world economy took a turn for the worse and commodity prices
started to fall, so imported inflation lessened and the CPI ended the year only 3.8 per cent above
that of 2010.
Interest Rates
The table below shows development of the JIBOR (Jakarta Interbank Offered Rate) over the last
five years.
22
Table 13. Indonesia: Three Month Interbank Offered Rate, Year End 2007-2011
(Per Cent)
2007 2008 2009 2010 2011

8.01 12.13 7.06 6.64 5.27
Source: Bank Indonesia
As just mentioned, the central bank’s policy on interest rates has to be led by the consideration of
battling inflation. Before the crisis the danger of inflation and during 2007 the BI rate varied
between 8.25 and 8.75 per cent, and then in 2008 it went to 9.50 per cent during the terrible last
quarter of the year.
During 2009 Bank Indonesia lowered the BI Rate in episodes, aggressively at first, then mildly.
From September to December 2009, it was held at 6.50 per cent. During 2010 and in early 2011,
the policy mix was primarily targeted at responding to inflationary pressure and heavy capital
inflows, but from the third quarter 2011, it shifted more to stabilisation of the financial market
and countercyclical action in curbing the risks of the weakening global economy.
To anticipate the risk of worsening global economic conditions, it became necessary to bolster
domestic resources of economic growth. For this reason, and in view of confidence for even
more subdued inflation, from September 2011, the monetary policy response embarked on a
more loose bias. This change in stance commenced with a downward adjustment in the lower
limit of the interbank interest rate corridor and was followed by cuts in the BI Rate in October
and November 2011, bringing the BI Rate to 6.0 per cent at the end of 2011.
Foreign Trade
Mining products dominate the exports of Indonesia, rising from 74 to 82 per cent of the total in
the last five years. Almost of the rest is made up by manufactured products, of which palm oil is
the most influential, at five per cent of all exports by value. It follows that the best customers for
the country’s products are those that most need its metals, coal and oil/gas for their industrial
activities. Japan is still the largest of all but China is advancing rapidly.
The most valuable imported products tend to be raw and processed material for industry but there
are significant items such as parts for capital goods and machinery, since the country has not
developed its own mechanical engineering industry to any great extent. The largest suppliers of
imports are Japan, China and the USA.
23
Table 14. Indonesia: Principal Trading Partners for Imports

and Exports, 2007-2010
(%)
2007 2008 2009 2010

Principal Import Sources
– China 13.0 15.0 17.0 15.0
– Singapore 14.6 11.4 12.3 15.2
– Japan 13.0 14.5 12.4 17.0
– EU-27 13.0 11.1 11.0 9.9
– USA 7.6 8.1 9.0 9.4
Principal Export Destinations
– Japan 14.3 12.4 12.2 16.3
– EU-27 14.6 14.1 13.7 10.8
– China 7.3 7.3 9.0 9.9
– USA 14.7 14.4 13.1 9.1
– Singapore 9.6 9.8 9.2 8.7
Rates of Exchange
All values in this report are expressed in Indonesian Rupiah or in US$. In 1996 the US dollar
bought Rp2,290. By 2007 the Rupiah had fallen to Rp9,100 per dollar. The following exchange
rates show how the financial crisis of 2008/2009 affected relations with some of the currencies
that affect the construction equipment business.
Table 15. Indonesia: Exchange Rates, 2007-2012
Currency July 2007 May 2010 June 2012

$ US 9,100 9,174 9,500
£ UK 18,700 13,529 14,849
¥100 7,600 9,868 11,843
€ 12,500 11,557 11,947
Source: The Jakarta Post
Although the relation with the US dollar has stayed quite stable, the high value of the Japanese
Yen after late 2008 has hit Japanese OEMs seriously. There is nothing to compare with its
56 per cent revaluation, as shown above. The dollar and the euro have changed little and the
Pound sterling declined by 28 per cent up to 2010 but has appreciated by 10 per cent since then.
Intense local price competition among suppliers of new construction equipment has also meant
that used Japanese construction equipment has found it all the harder to make progress.
24
GEOGRAPHY
The Republic of Indonesia consists of 17,508 islands, of which 6,000 are named and only 992 are
permanently settled. The total land area is about 1.9 million km2 stretching from the Equator for
approximately 4,800 kilometres from west of the Malayan Peninsula to Papua New Guinea. The
country is bounded in the North-East by the Philippines, in the South by Australia, in the
North-West by mainland South-East Asia, in the North by the Sarawak and Sabah provinces of
Malaysia; and by Papua New Guinea in the East.
The five largest islands are Java, Sumatra, Kalimantan (the Indonesian part of Borneo),
New Guinea (shared with Papua New Guinea), and Sulawesi. The capital, Jakarta, is on Java and
is the nation's largest city, followed by Surabaya, Bandung, Medan, and Semarang. Java is the
principal island in terms of population and land use. Its population of almost 110 million, about
58 per cent of the national total, makes it one of the most densely populated areas in the world.
Sumatra represents 25 per cent of Indonesia’s area and holds 18 per cent of its population.
Kalimantan is the Indonesian portion of the island formerly known as Borneo, which is also
occupied by two East Malaysian states and the British protected Sultanate of Brunei. Sulawesi,
formerly known as the Celebes, is inhabited by seven per cent of Indonesia’s inhabitants. Papua
is the Indonesian portion of the island of New Guinea, which is also occupied by the independent
nation of Papua New Guinea.
Other important island groups are the Malaku, once known as the Spice Islands, and the
Lesser Sunda Islands, including East Timor, which were integrated as a part of the Indonesian
Republic in July 1976. East Timor gained independence from Indonesia in May 2002.
There are volcanic mountain ranges across all the larger islands with 13 peaks rising to more than
3,000 metres, and the slopes are well forested. In fact, around two-thirds of the land area is
covered by tropical rain forests. More than 100 of the 400 volcanoes are still active and volcanic
ash, carried by the rivers, has made the coastal plain very fertile.
Climate
The islands have an equatorial climate, largely influenced by the monsoons. In the lowland and
coastal areas the climate is warm and humid, averaging 75-85 per cent but reaching up to 100 per
cent humidity; and with temperatures varying little from the annual average of 26ºC, the hill
areas have an average temperature of 21ºC with the greater variations due mainly to the cooling
effect of the ocean and mountain breezes.
25
The “wet season” is brought in with the north-west monsoon from the Indian Ocean and lasts
from October to April, whilst the “dry season” is brought with the south-east monsoon from
Australia and lasts from about May to September with seasonal variations.
Population
Indonesia has the fourth-largest population in the world, 242.6 million, according to UN
estimates made in 2010. It is the most populous of the South-East Asian nations. The population
growth has slowed from over three per cent in the 1970s to 1.1 per cent today. By 2020, the
population will have grown by 30 million but that is a much lower prediction than previously
made. The median age of the population is 27.7 years for males and 28.7 for females. 27.3 per
cent of the population is under 14 years old. There is a growing problem of youth unemployment
with an estimated 35 per cent of persons under 25 without work.
The average population density is now 115 per km², although it ranges from 900 per km2 in Java
to only 4.7 per km2 in Papua. The proportion of the population that is urban dwelling increased
markedly in the 1990s from 30 to 40 per cent and now stands at 44 per cent. Migration to the
cities is estimated to be creating an annual increase in urban populations of 3.3 per cent since
2005, while the countryside population is virtually static.
Table 16. Indonesia: Population in Main Cities, 2010
City Province Mn
Jakarta Jakarta 9.6
Surabaya East Java 2.8
Bekasi West Java 2.3
Palembang South Sumatra 1.5
Bandung West Java 2.4
Medan North Sumatra 2.1
Tangerang Banten 1.8
Semarang Central Java 1.6
Depok West Java 1.7
Makassar South Sulawesi 1.3
South Tangerang Banten 1.3
Jakarta, the capital, is by far the largest population centre. Since 2000 it has been located within
a region called Jabodetabek. The name of the region is taken from the first two or three letters of
each city's name: thus Jakarta, Bogor, (Depok), Tangerang and Bekasi form an area that when
formed had 23.3 million inhabitants and now has 28.2 million. The largest harbour in the Jakarta
26
area is Tanjung Priok. The city, formerly known as Batavia, is situated on the north-west coast
of Java, facing the Java Sea. It is the seat of government and the country’s main commercial and
trading centre.
Racially, 95 per cent of the population belongs to the Malay type, most common in the western
islands, whilst darker skinned races of Melanesian type often appear in the east. However, there
are more than 300 ethnic groupings making Indonesia one of the most diverse nations in the
world. There is a large Cantonese Chinese community of around four million, and small Arab,
Indian and Eurasian minorities.
Indonesia has the world’s largest Islamic population; about 86 per cent of the population is
Muslim, although the practice of the religion is not as austere or intrusive as in many countries in
the Middle East, for Indonesia is a secular state. There are 380,000 mosques, 16,000 Protestant
churches, 2,000 Catholic churches and about 5,000 Buddhist and Hindu temples.
The official language is Indonesian, known locally as Bahasa Indonesia, which is based on
official Malay. It is written in Roman letters but the roots of some words are Sanskrit, reflecting
the islands’ Hindu-Buddhist history. It has been the official language of the country since
independence and most people can speak it, although they usually converse in local languages, of
which the most common is Javanese. English is used in government and commercial circles,
though with varying degrees of proficiency.
For administration purposes, Indonesia is divided into 33 provinces, each headed by a governor.
The provinces are further divided into either regencies (405) or cities (97). The difference
between a regency and a city lies in demography, size and economy. The regencies were
inherited from the Dutch colonialists, who had converted local kings into this status (although
they gave them no power whatsoever). Generally, a regency comprises a larger area than a city
but it does have a capital city. A city usually has non-agricultural economic activities. Both are
sub-divided into districts, of which there are 6,543. Below that is the final level of villages,
75,244 in number. One type of village is the Desa, which can be defined as a body which has
authority over the local people in accordance with acknowledged local traditions of the area. The
head is elected by popular vote. The other type of village is a Kelurahan, which has less power
than a Desa. A Kelurahan is headed by a Lurah. Lurahs are civil servants and so this is in effect
part of the Regency/City government bureaucracy.
27
FORECAST ASSUMPTIONS
General Economy
Table 17. Indonesia: Forecast GDP Growth, 2012-2016

Annual % Change
2012 2013 2014 2015 2016

Total GDP 5.9 6.5 6.4 6.5 6.6
Private Consumption 4.9 5.2 5.4 5.3 5.4
Gross Fixed Investment 9.2 8.8 9.3 9.6 9.5
Source: Economist Intelligence Unit
As exports account for a relatively small proportion of its GDP, Indonesia should cope better
than most of its neighbours with any slowdown in global economic expansion in 2012 but results
in the early part of the year show a moderate slowing compared to the 6.5 per cent enjoyed in
2011. The economy should expand by 6.5 per cent in 2013 and will continue to grow at around
this pace in 2014-16. Private consumption will remain the main engine of growth, expanding by
5.2 per cent a year on average in 2012-16, as household incomes rise in real terms.
After years of banking and corporate-sector restructuring following the 1997-98 Asian financial
crisis, the conditions finally appear to exist for sustained growth in gross fixed investment, which
should expand by 9.3 per cent a year on average in 2012-16, supported by stronger domestic
demand and increased inflows of foreign investment. Exports of goods and services grew at
double-digit rates for the second year in a row in 2011, largely thanks to healthy Chinese demand
for Indonesia’s commodities, but growth will slow to 7.1 per cent in 2012 and then an average
annual rate of 9 per cent in 2013-16. Growth in imports of goods and services will average
9.4 per cent a year during the forecast period.
For 2012, the government is preparing the ground-breaking for 110 projects related to the MP3EI
programme (see below) valued at $41 billion. All of these projects are divided among six
corridors, with 34 projects in the Sumatra corridor worth $7.92 billion, 31 projects in the Java
corridor worth $24.5 billion, 10 projects in the Kalimantan corridor at $665 million and nine
projects in the Sulawesi corridor at $442 million. The Bali-Nusa Tenggara corridor has eight
projects worth $1.66 billion and the Papua-Maluku corridor has 18 projects worth $6.22 billion.
In May 2011 the government published its Master Plan for the future of the economy up to 2025.
While it is full of optimistic propaganda, it does also indicate that certain directions will be
28
followed. The Master plan for Acceleration and Expansion of Indonesia Economic Development
(Master plan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia – MP3EI) aims to
transform Indonesia into one of the 10 major economies in the world by 2025. The private sector
will be given a major role in economic development, particularly in the area of infrastructure.
The Master plan identifies six economic corridors to boost economic development.
Sumatra: Production and processing of natural resources and the nation’s

energy reserve.
Java: Industry and service provision.
Kalimantan: Production and processing of national mining and energy reserves.
Sulawesi: Production and processing of agricultural, plantation, fishery, oil and
gas, and mining.
Bali – Nusa Tenggara: Tourism and food.
Papua – Maluku Islands: Development of food, fisheries, energy, and mining.
The Master plan has eight main programs: agriculture, mining, energy, industrial, marine,
tourism, telecommunications, and the development of strategic areas. The Master plan seeks to
encourage large-scale investment in 22 primary activities and it is easy to see that many will have
relevance to the products covered in this study.
Shipping: Most shipyards can only build ships of 500 deadweight tons (DWT) or less. There
are currently 10 shipyards than can build ships above 10.000 DWT. As a maritime country,
Indonesia will build more shipyards with a capacity above 5.000 DWT.
Textiles: A priority industry and the only non-oil manufacturing export industry with a positive
net export.
Food and Beverages: Growing rapidly, with milk highlighted as having potential to be
developed further as the consumption of dairy products per capita in Indonesia is relatively low.
Steel: The production capacity of domestic steel and crude steel amounts to 6.5 million tonnes,
with an average utilisation rate of only 50 per cent. Steel consumption is still very low at
29 kg/capita, compared to the average of 170 kg/capita.
Defence Equipment: The national technological capability should be able to produce defence
equipment products as well as commercial products that are highly competitive.
29
Palm Oil: There has been continuous expansion of the palm oil plantation area, with the last
five years seeing an increase of approximately 40 per cent in the cultivated area. Given this
expansion was recent, further growth in production is anticipated as plantations reach maturity
and yields grow.
Rubber and Cocoa: Indonesia is the second largest producer of rubber and cocoa in the world.
Animal Husbandry: Beef cattle are the priority but the limited infrastructure has trouble
supporting the distribution of cattle products and the industry is poorly developed.
Timber: Forestry contributed between 8-9 per cent of National Gross Domestic Product (GDP)
between 2005 to 2009. Investment plans include commercial scale Industrial Plantation Forest
Estate (HTI) and Wood Production and Primary Timber Industry (IPHHK).
Oil and Gas: This sector is the largest contributor to the Indonesian economy. The acceleration
strategy for oil and gas development is to increase national oil and gas production to 1 million
bpd by 2025. Currently the average level of reserves lifting is only approximately 893,000 bpd.
In the near future, oil and gas exploration will be directed to areas with more difficult conditions
such as deep sea exploration, which would require higher investment.
Coal: From 1996 to 2010, coal production grew by an average of 14.8 per cent per year and
exports by 15.1 per cent per year. The level of domestic coal consumption experienced an
average growth of 13.8 per cent per year within the period of 1996-2010.
Nickel: Indonesia is the fourth largest nickel producer, digging out 60 per cent of world nickel
production. It has eight per cent of world nickel reserves, and therefore mining and processing is
eligible for further development.
Copper: Production is not growing but exports are doing well.
Bauxite: Indonesia is ranked 7th in the world in reserves, and 4th as a producer. The
development of an industry to process bauxite into alumina should be seriously considered.
Fisheries: With access to abundant fishery resources in both marine fishery and freshwater
fishery, the country is the largest producer in Southeast Asia.
30
Tourism: The National Tourism Development Master Plan 2011 – 2025 targets foreign tourists
visit will increase to 20 million per annum by 2025.
Food and Agriculture: Basically a message of grow more rice and maize.
Sunda Straits Strategic Area: Sumatra and Java are connected only by ships and aircraft which
are heavily influenced by weather conditions. The Government plans to build the Sunda Straits
Bridge which will connect the island of Sumatra and Java. This bridge will provide efficient
transportation that will shorten the travel time to only 30 minutes compared to ferry services that
take on average of 2-3 hours. Moreover, it will be provided with railway access which enables
passengers and freight to use train services to cross the straits.
Transportation Equipment: In the industrial sector for equipment and machinery, the
transportation equipment segment is the largest contributor and a local capability is a priority.
Information and Communication Technology (ICT): The government has targeted the
development of the National Broadband Network (NBN) for the period 2010-2015. Every 10 per
cent increase in broadband penetration can enhance economic growth by 1.38 per cent.
Construction
For construction, the brightest indication is that President Bambang Yudhoyono has pledged to
double spending on roads, seaports and airports to $140 billion over the next five years, as part of
his push to deliver economic growth of at least 6.6 per cent over the period to 2014. This is a
high priority, since in the area of regional competition for investment, Indonesia is becoming
known as a huge potential market where nobody would dream of installing production facilities
because of the high cost of logistics.
There will be considerable activity in electricity generation and distribution as energy needs are
predicted to grow by 9.0 per annum from 2010 into the foreseeable future. After the partially
completed power station programme of 2006-2009, there is a plan for a further 10,000 MW of
generating capacity to be built by 2015, including 4,733 MW from geothermal sources. There is
an urgent need to upgrade the power transmission system of the capital, Jakarta.
21 power plants will be constructed by PLN, the state generator, across the country in the second
phase of the 10,000 MW fast-track programme, while independent power producers (IPP) will
set up 71 plants with a total capacity of 5,306 MW. It will contribute 12 new power plants to
31
complement the second phase. There are two hydropower plants: Upper Cisokan hydro power
plant in West Java, with a capacity of 4x260 MW and Masang 2 in West Sumatra with 55 MW.
There are also two gas-fired power plants in Tahuna, North Sulawesi (2x4MW) and a gas-fired
power plant in Bangkanai, Central Kalimantan, (120 MW) with only one coal-fired power plant
in Melak, East Kalimantan (2x7MW). The remaining seven are coal and gas-fired power plants
in Sabang, Aceh (8 MW); Putussibau, West Kalimantan (2x4 MW); Selayar, Central Sulawesi
(2x4 MW); Larantuka, East Nusa Tenggara (2x4 MW); Tobelo, North Maluku (2x4 MW); Tual
in Maluku (2x4 MW); Tanjung Batu in Riau Islands (8 MW).
The country has the potential to increase oil and gas production with positive implications for
aspects of construction and steel fabrication industries. It has large proven reserves of natural
gas totalling 185.5 TCF, including 95.9 TCF recoverable. The current export volume of natural
gas is around 3 TCF. Production will increase as the country wishes to become less dependent
on oil and coal and will consequently need investment in extraction and distribution
infrastructure. There are a number of new pipeline construction projects in prospect, mostly
linking to lines recently installed.
In 2005, Yudhoyono's government announced plans to build about 1,000 kilometres of toll roads,
including a 650 kilometres section of the trans-Java toll road, and roads in South Sulawesi and
North Sumatra. Progress has so far been very slow, and only about 10 per cent has been built,
while another 10 per cent is under construction. The government has, however, announced that it
will place a top priority on the trans-Java road, aiming to complete all the missing sections
(three quarters of the total length of 897 kilometres) by 2014. The largest toll road operator,
PT Jasa Marga Tbk plans is investing $2.17 billion in the construction of eight new toll routes
over the period to 2015. When all eight toll routes are completed, they will increase the total toll
road length operated by Jasa Marga by 40 per cent to more than 700 kilometres.
The road capacity improvement can be divided into new road development and road widening
schemes. The aims of this improvement are to improve capacity on main corridors such as the
North Java Road Corridor and the Sumatran East Coast Road; to provide access to remote areas
in districts or villages in eastern Indonesia; to increase security on trans-highways in Borneo,
Sulawesi and Papua.
The government has at last woken up to the benfits of improving the neglected rail network. In
late 2011 it began the process of tendering for double-tracking the remaining single sections of
the Trans-Java Railway between Jakarta and Surabaya. It will cost $1.1 billion and will involve
the doubling of approximately 425 kilometres of single line on the 727 kilometres railway
32
between Jakarta and Surabaya via Cirebon and Serebang; four sections of single line remain
while around 300 kilometres of double track are already in place. The northern Trans-Java route
would then form the backbone of the rail network on Indonesia’s most populous island, and
relieve the pressure on the congested Pantura coastal highway.
Rehabilitation of the Trans-Java Railway is one of a number of projects being taken forward
under the government’s MP3EI Master Plan. This programme also includes provision for the
construction of a 33 kilometres rail link from Manggarai to Soekarno Hatto airport, a project
which is being managed by state railway PT KAI. This might go to tender in 2013.
In total, the budget for transportation projects under the MP3EI is Rp814 trillion – Rp326 trillion
for railway projects, Rp339 trillion for roads, Rp117 trillion for ports and Rp32 trillion for
airports.
It is perhaps obligatory here to enter a note of caution concerning the proclaimed plans. The
country has a reputation for ‘adhoc infrastructure’, where projects arise out of nowhere and as
often as not go back there. For example, Jakarta decided it wanted a metro but in 2006 the
project disappeared. Then it decided it wanted a monorail, like in Bangkok but that foundered in
2012 over unsatisfactory passenger volumes forecasts. It seems odd that two dozen pillars had
already been built before it was decided that the project was not viable but the consortium still
wants $60 million of compensation. Recently, Jasa Marga, the state toll road company has
adorned the roads in the Jakarta area with images of a new toll road built on top of the existing
one. Arguing that at least it would not have to buy any land, it has proposed this aerial wonder
without consulting anyone about what would happen to all the extra vehicles coming into one of
the most overcrowded cities on the planet.
Better news is that a (slow) railway line to Jakarta Airport has just started construction; on the
other hand a faster line on 33 km of pillars is airily predicted to start in 2014 and cost ‘about
$2 billion’. Independently, the airport company is expanding its capacity from 22 to 62 million
passengers per year at a cost of $800 million. It will come as a relief, given that in 2011 it
handled 51 million passengers with its ‘22 million’ capacity. The company also wishes to add
terminals but the state is not keen on the $480 million needed to buy the necessary land.
Cement Industry
The growing construction activity, fuelled in part by the government's infrastructure investment
plans, has inspired the largest cement producers to announce plans to invest in expanding
33
production capacity. Semen Gresik (State-owned) plans to spend $2 billion to build new cement
factories in Java, Sumatra, Kalimantan and Papua island that will combine to produce 10 million
tonnes of cement.
China Anhui Conch Group, which controls China’s biggest cement maker, also plans to spend
$2.35 billion to build cement factories in Kalimantan and West Papua with a total production
capacity at 10 million tons and Siam Cement also wants to enter the market.
PT Indocement Tunggal Prakarsa, the second largest producer and part of Heidelberg Cement
has a plan to build 4.4 million tonnes of capacity at a brownfield site in Citeurop by 2014.
The third largest producer, Holcim Indonesia, is expanding its production capacity to 9.9 million
tonnes by 2013 from the current 8.2 million tonnes. The new factory in Tuban, East Java will be
completed by the end of 2013.
There is, however, a limit to the potential fortunes to be made. Cement made locally is the most
expensive in the region for two reasons. The three big producers control 90 per cent of the
market; and the infrastructure is so poor that transport costs are high and imported cement is
unviable. If against the recent history, the government really uses the road and bridges funds to
build those same structures instead of stealing them, the price of delivered cement will fall and
market structure will change.
Oil Palm Plantation Expansion
The government claims that, based on the land characteristics and the climate, it has 18 million
hectares of land, including the existing 9.7 million hectares, that potentially could be used for oil
palm plantations, without disturbing forest preservation efforts. Such expansion promises to be
controversial due to environmental concerns. Palm oil producers argue that oil palm cultivation
is presently the most profitable form of land use on peat lands and that as the highest-yielding
oilseed, palm oil is providing a low-cost alternative for food production.
The demand for palm oil will likely remain strong and research and development work is being
done in Indonesia and Malaysia. Yields will steadily increase as the newly planted areas enter
into their twenty year plus productive life cycle. In addition, replanting will continue to adopt
better suited varieties developed from hybrid research and cloning. The availability of land,
coupled with recent years of high seed sales, record energy prices, and high vegetable oil prices
34
are factors that will result in Indonesia continuing to lead the world in palm oil production for
years to come.
Mining
As ever, the long term prospects for minerals are good but in the short term investors worry
about the state of the market, their raising of capital, the obtaining of concessions and all the
other aspects that control mine development. From 2010 to early 2012 the leading product, coal,
was doing very well but after the beginning of the current year the price of coal on the
international market began to fall.
Ironically, the fortunes of many small producers depend on exporting thermal coal to China
because that country does not produce enough for itself. China is, however, also deficient in
infrastructure for handling coal and the few importing sites have quickly run up massive stocks.
Large producers are not that much affected as they have longer term contracts but those that
depend on the spot coal market have suffered a price fall in 2012 from $112 to $85 per tonne.
50 per cent of local coal is sub-bituminous, which has less carbon in it and has dropped from
$87 to $69 per tonne in the first half of 2012. Many small producers have costs of $50 per tonne
and some have stopped production in mid-2012. About 15 per cent of production is being sold at
a level below cost in mid-2012.
This does not mean an end to the growth of the coal industry in the longer term, as the domestic
market will come to replace export volume in the end. Domestic demand could rise from around
70 to 110 million tonnes as all the power stations of the programme planned until 2015 come on
stream. Currently, coal for coal-fired power stations takes 25 million tonnes. The cement
industry takes almost 6 million tonnes and the paper and pulp sector 1.5 million tonnes. In the
longer term China, in any case, will become less of a market as the country is determined to
become more self-sufficient. In 2012 the large producers are able to take action to reduce their
output and stabilise prices, so they have cut their target from 390 to 360 million tonnes for the
year.
The other large question in mining is what will happen to President Bambang’s initiative to force
the miners to start smelters. The government has announced that from 2014 it will ban the export
of unprocessed ore. Miners will have to build their own smelters or find others to do the job
locally. Raw materials can immediately be exported only by operations that have ‘CnC’ status.
This would happen after the Ministry has examined them and found their permits and operations
‘Clean And Clear’.
35
The miners say that there simply is not enough electricity available to run smelters, except in
Java, not the centre of mining. Secondly it takes a mountain of money to build a smelter and
needs at least five years. Thirdly, smelters need roads, ports and waste dumps. Fourthly, they
have dramatic effects on the local voltage, so even where there is enough current, the power
stations have to be modified. Some miners are already smelting, some are conceding that they
will build smelters while still being obliged by long terms contracts to provide raw minerals to
their clients. It adds a large element of uncertainty to the inevitable caution coming from
deteriorating prices for raw materials, as seen in 2011 and 2012.
CONSTRUCTION, MINING, FORESTRY AND AGRICULTURE
Construction Activity
Construction has grown strongly in the last five years. The macroeconomic figures shown below
indicate strong growth, pushed by the government’s aim of increasing investment from 19 to
28 per cent of GDP.
Table 18. Indonesia: Growth in Construction Activity in GDP, 2007-2011

(Per Cent Real Change)
2007 8.6
2008 7.3
2009 6.9
2010 6.9
2011 6.7
For the rest of the figures, analysis has to rely on data at current prices, with the proviso that
inflation has played quite an important role in the construction industry recently.
The largest part of the industry is building construction.
In the table below building construction is for both private and public sector work. Civil
construction covers roads, bridges, tunnels, irrigation, water supply and harbours. The
specialised work category includes installation and maintenance of systems in buildings like air
conditioning, electricity, as well as civil work like street lights; as well as piling, roofing,
foundations and steel frame erection.
36
Table 19. Indonesia: Construction Completed by Type, 2007-2010

(Rp Billion)
2007 2008 2009 2010

Building Construction 34,612 37,312 40,050 34,078
Civil Construction 28,616 30,848 46,596 67,684
Specialised 18,447 22,695 24,185 23,269
Total 81,675 88,045 110,832 125,031
For more detail, the table below shows the main specialisms, valued on the basis of the contracts
completed.
Table 20. Indonesia: Value of Construction Completed

by Type of Construction Activity, 2007-2009
(Rp Billion)
2007 2008 2009

Residential 9,305 11,263 13,634
Non-Residential 23,528 29,614 37,272
Electrical Installation 3,563 3,775 4,000
Gas and Water Supply Installation 320 275 237
Sanitary Installation 184 297 477
Foundation 625 1,128 2,034
Sound Insulation, AC, Lift 1,476 1,262 1,079
Water Supply Network 538 681 863
Oil and Gas Pipe Network 646 1,032 1,648
Electricity Network 2,406 3,654 5,549
Road and Bridge Work 21,008 25,346 30,579
Irrigation/Drainage 5,392 7,000 9,086
Electric Power Supply and Telecoms 458 218 104
Airports, Harbours, Bus Stations 1,513 1,113 818
Other 6,180 7,827 9,912
Total 79,391 94,485 117,293
Roads
In the 1990s the length of asphalted road increased by 70,000 kilometres but the pace of increase
has been slower since then. The length of non-asphalted road has also increased by
57,000 kilometres since the beginning of the century. Of the total road length, 57 per cent is
paved. The national road network is allegedly in good condition with 95 per cent paved and
81 per cent in good and fair condition. The provincial road network is also predominantly in
37
good or fair condition. The district rural and urban roads are only 50 per cent in reasonable
condition.
Table 21. Indonesia: Road Lengths by Type, 2006-2010

(Kilometres)
Asphalted Not Asphalted Total

2006 208,732 185,062 393,794
2007 256,548 164,987 421,535
2008 258,744 179,015 437,759
2009 271,230 205,107 476,337
2010 277,775 209,559 487,314
More than 70 per cent of the existing road network is located in Sumatra, Java and Bali Islands
which represent only 31 per cent of the total area of Indonesia. About 23 per cent of the road
network is located in Kalimantan, Sulawesi and West Nusa Tenggara (NTB) islands, while
seven per cent is located in East Nusa Tenggara (NTT), Maluku and Papua islands, which
collectively represent 25 per cent of the area of the country.
The state of the existing roads in reality is not particularly good, mainly because of the huge
growth of vehicle numbers.
Table 22. Indonesia: Vehicle Population by Type, 1990-2010

(Million)
Cars Trucks
1990 1.3 1.0
2000 3.0 1.7
2008 7.7 4.6
2010 8.8 4.8
Source: State Traffic Police
About 35,000 kilometres can be classified as arterial roads but only 775 kilometres are toll roads.
70 per cent of those are in the hands of the state owned Jasa Marga, although it has tried to sell
them off to finance new roads.
2011 was a shameful year for the toll road industry, when it added only 17 kilometres to its total
length, against a target of 125 kilometres. There are problems, since toll roads require huge
capital outlay and usually pay back after more than 10 years, whereas most Indonesian banks and
38
the local capital market operate with a five year time horizon. Out of the 1,700 kilometres
proclaimed as necessary for construction during 2005 to 2009 only 48 kilometres were ever built.
2010 was better, with 110 kilometres added but land acquisition and regulations remain as major
problems. At the same time as admitting to the 17 kilometres result for 2011, the government
said it was still confident it would reach its target of 3,088 kilometres by 2014.
Mining
Mining is a massive part of the economy. In the middle of the last decade it was 50 per cent
larger than the construction industry but now it is 18 per cent larger. It has grown along with the
rest of the Indonesian economy but its share of GDP has not grown. Half of the value in the
sector is in oil and gas, much of which is off-shore and subject to the vagaries of fields coming
into and going out of production.
Table 23. Indonesia: Growth in Mining and Quarrying Activity by Type, 2007-2011
(Per Cent Real Change)
Mining* Quarrying Total

2007 -1.0 7.5 2.0
2008 5.3 8.5 0.5
2009 11.9 7.0 4.5
2010 7.3 6.5 3.6
2011 9.0 7.5 1.4
* Excluding oil and gas

Growth before 2009 was modest, in real terms. In the last three years, however, mining volume
has increased by about 30 per cent and quarrying by more than 20 per cent.
The production record is shown below.
39
Table 24. Indonesia: Mineral Production, 2006-2010

('000 Tonnes)
2006 2007 2008 2009 2010

Bituminous Coal 162,295 178,790 188,717 208,006 256,789
Copper 818 797 655 999 878
Nickel Ores (Tonnes) 4,354 7,113 6,572 5,802 5,433
Bauxite 1,502 1,251 1,152 935 1,050
Tin 81 66 53 46 43
Crude Oil (Tn Barrels) 313 305 312 303 301
Natural Gas* (Bn m3) 102.3 79.4 81.8 73.6 77.7
* Gross
Source: USGS and Official Statistics
Coal is the largest earning product. Production was only 2 million tonnes in 1985 but by the end
of the 1990s it was 62 million tonnes. The increase in world energy demand, particularly from
China, has completely changed the perspective and outlook for the industry. Production of coal
doubled in the period 2001-2006 and grew by nearly 60 per cent by 2010. Incidentally, figures
on this subject can be somewhat confusing, since they often ignore about 55 million tonnes of
anthracite (as does the table above) and, while the trade association makes an allowance for
illegal mining in its statements, the government figures simply pretend it does not exist. Illegal
coal mining is small scale but common enough. The classic scam is to win a forestry permit and
open up a coal mine conveniently surrounded by trees. The production is often sold to local
governments in China, desperate to keep their power stations running.
Domestic demand for coal is set to increase substantially as the government has plans to install
an extra 10,000 MW of electricity generation, all powered by coal. This extra capacity will
require an annual feedstock of at least 40 million tonnes of coal. Currently, coal for coal-fired
power stations takes 25 million tonnes. The cement industry takes almost 6 million tonnes and
the paper and pulp sector 1.5 million tonnes.
According to the Ministry of Energy and Mineral Resources, Indonesia has a total of 60.5 billion
tonnes of coal deposits of which only 7.0 billion tonnes are classified as proven reserves. Major
coal mines are located in Kalimantan, which has deposits of 32.9 billion tonnes and Sumatra with
27.3 billion tonnes. The most extensive reserves have been found in Southern Sumatra, but the
highest quality reserves are in Eastern Kalimantan. Coal contractors operating in Kalimantan
hold concessions to exploit a total of 4.2 billion tonnes of proven reserves. PT Kaltim Prima
Coal (KBC) controls the largest proven reserves estimated at 1.3 billion tonnes, followed by
PT Arutmin Indonesia and Adaro Indonesia, with one billion tonnes each.
40
Currently, there is much concern over how much coal should be exported. Indonesian coal has
heat values ranging from low to medium, with low levels of ash and sulphur. This makes it
attractive to export buyers in western countries since the sulphur content is below one per cent.
The Adaro coal mine, for example, ships coal to the USA for blending with domestic coal to
meet US strict pollution standards.
Since 2011 coal producers have been required to sell at least 24.17 per cent of their output to the
domestic market. The largest part of that is Perusahaan Listrik Negara (PLN), the state
electricity company and supplier of 90 per cent of the power generated in the country. The new
regulation affects 53 coal-mining companies involved in 42 coal contracts of work, 10 mining
right and mining license holders, and PT Tambang Batubara Bukit Asam. The Government
assumes that domestic demand would reach 78.97 Mt in 2011 (of which 66.28 Mt would be
consumed by domestic power plants). It was expected to allocate 55.82 Mt to PLN, 8.97 Mt to
independent power producers, and 1.49 Mt to others using coal for power generation.
In general, there has been a change of heart about the exploitation of the country’s mineral
wealth. The easy route of letting the international miners come in and remove everything they
want has gone. This is partly because of the thought you can only remove it once; and partly
because the old policy missed the chance to build a processing industry.
Table 25. Indonesia: Leading Coal Producers and Their Output, 2005-2010
(Million Tonnes)
Company Location 2005 2009 2010

Adaro Indonesia South Kalimantan 26.7 40.0 47.8
Kaltim Prima Coal East Kalimantan 27.6 38.2 40.3
Kideco Jaya Agung East Kalimantan 18.1 24.7 31.6
Arutmin Indonesia South Kalimantan 16.8 19.3 22.0
Berau Coal East Kalimantan 9.2 14.3 18.9
Indominco Mandiri East Kalimantan 7.5 12.4 14.8
Tambang Batubara Bukit Asam South Sumatra 8.6 11.4 13.8
Mahakam Sumber Jaya South Kalimantan na 4.4 8.0
Adimitra Baratama East Kalimantan na na 3.8
Gunung Bayan Kaltim East Kalimantan 4.3 4.1 3.2
Perkasa Inakerta East Kalimantan na na 3.2
Bhumi Rantau Energi South Kalimantan na na 2.8
Source: APBI-ICMA
Oil is an important topic in 2012. Oil production has declined and the country became a net
importer in 2003. From 1.5 million barrels per day (bpd) in 2000 it has declined to around
900,000 bpd but the Government offered 50 new work fields for investors in 2010. Pertamina
41
found 61 Mbbl of oil and 17.5 million m3 of gas in blocks explored at Indramayu and Bekasi in
West Java and South Sumatra. Some other oil fields will start production in Sumatra, Sulawesi
and Kalimantan. The government is marketing exploration rights vigorously to get back to
self-sufficiency and has waived VAT on machinery imported for the oil industry (with positive
effects for crane sales). The Government plans to produce 1 million barrels (bpd) of oil in 2012.
Production would be increased in the Cepu Block and in the Chevron field.
The related product of natural gas is a very important sector for the country. Indonesia is Asia’s
biggest exporter of Liquefied Natural Gas, LNG.
Under a new mining and coal law, all existing mining and coal contracts are be upheld. Shortly,
exports of raw materials may be banned and raw ore and concentrates may be required to be
smelted or refined in Indonesia. A provision in the law shortens mining contracts from the
current 30 years to 20 years with an option to extend them for an additional 20 years. The
government issues guidelines to limit production of key minerals, including copper, gold, iron
ore, nickel, and tin, to ensure domestic supplies and reduce future exports. The limit is in place
for five years and is evaluated annually. The evaluation takes into consideration conservation
needs, export demand, domestic supply, national production, and state revenue, as well as the
mineral reserves available in each Province and producing area.
Finally to a product essential for the construction industry, cement.
Table 26. Indonesia: Cement Production, 2007-2010

(Million Tonnes)
2007 2008 2009 2010

36.0 37.0 36.8 37.8
Sources: USGS and Trade Association
The government has been encouraging state-owned cement companies to increase their
production capacities to meet domestic demand, which was growing at a rate of seven per cent
per year. They have raised capacity from 47 to 51 million tonnes since 2006. Current
consumption throughout the country is rising fast since mid-2011. In 2011 it rose by 17 per cent
from 41 to 48 million tonnes, not far from total capacity. Consequently, the producers cut their
exports by 60 per cent to only 1.2 million tonnes. The main cement market is Java Island, which
accounts for 55 per cent of national consumption.
42
Forestry
There is no avoiding the fact that this industry is large but hugely controversial. The term ‘illegal
logging’ is so often seen in the same sentence as the name of the country. The installation of
massive processing capacity has brought about the problem. Indonesia’s timber industry started
to grow intensively in the early 1980s. The expansion of sawmills, ply mills and other advanced
processing industries was followed by the rapid expansion of pulp mills and paper mills.
However, the growth of this timber industry – without taking into consideration the supply
capacity – led to an enormous deficit in supply.
In 2003 a decree decreased the annual allowable cut for timber from natural forest to only
6.8 million m3 per year. The total production of logs from timber plantations is approximately
10 million m3 annually. This means that Indonesia’s legal timber production stands around
17 million m3. On the other hand, the total demand for round wood from the timber industry
amounts to approximately 65 million m3. The state has given the International Tropical Timber
Organisation (ITTO) the following figures:
Table 27. Indonesia: Production of Logs, 2007-2010

('000 m3)
2007 2008 2009 2010

36,010 36,010 34,150 34,150
Sources: International Tropical Timber Organisation
Pulp and paper consume large amounts of timber. Well-known pulp and paper factories have
plantations that can supply only a quarter of their needs, so the rest comes from timber from
natural forests, with part of that not legally sourced. In the past there was a source of huge
income from exported plywood going to China and Europe but production is declining because
of better enforcement of the law, which anyway now allows fewer quotas and the sad fact that
suitable forest has become exhausted. Plywood exports are only 10 per cent of what they were
20 years ago.
Indonesia’s wood processing industry has a combined installed capacity of approximately

74 million m3. Even if the industry does not run at full capacity, it still consumes approximately
53 million m3 of round wood per year, 36 million m3 of which comes from illegal sources
(WWF/World Bank, 2005). This figure does not include the needs of the predominantly illegal
small-scale sawmills.
43
Agriculture
Approximately 16 per cent of the country is cropland, arable and permanent. Of those 40 million
hectares about 16 per cent are irrigated. There two distinct kinds of agriculture, the plantations,
which are industries run by corporations; and the small food growing farms that are generally in
the hands of private individuals.
Plantation Agriculture
The plantations are dominated by the expanding palm oil industry. The table below summarises
the situation.
Table 28. Indonesia: Plantation Agriculture Summarised, 2010
Area
Product ('000 Ha) Tendency
Oil Palm 5,033 Rising fast
Rubber 472 Decreasing recently
Cocoa 96 Steady
Coffee 49 Reduced
Tea 67 Decreased from 90,000 hectares
Sugar Cane 429 Fluctuating but not falling
Palm oil production is growing because it is popular as cooking oil in a region of rising affluence
and as an ingredient is processed food. Indonesia has been the largest producer in the world
since 2006. The area harvested has grown from 999,000 hectares to 3.59 million in 2005 and
4.12 million hectares in 2008 (but 9.7 million hectares have been planted, the gap being the land
that is waiting for a crop).
The island of Sumatra has long been the largest producer. The oldest large-scale plantations
were first established in 1911 on Aceh and North Sumatra province. Since those early days,
palm plantation development spread south and to the other areas of Indonesia. The highest
producing provinces on Sumatra are North Sumatra, Riau, and South Sumatra. Even though the
bulk of production remains on Sumatra, 70 to 80 per cent according to some sources, rapid
expansion is occurring on the island of Kalimantan, the second largest producing area. In recent
years, there has been a growing expansion of oil palm plantations in Central and West
Kalimantan. Important, but secondary areas of expansion are Sulawesi and Western New Guinea
(or West Papua). Even with the expansion areas, Sumatra will continue to be the leading
44
production centre for the foreseeable future. Satellite data shows that 300,000 hectares of forest
are destroyed each year for the creation of oil palm plantations.
Large areas of Sumatra and Kalimantan are being converted from virgin forest or tropical peat
bogs to oil palm plantations, with much international criticism about loss of habitat for local
wildlife and destruction of forest. The biofuel phenomenon pushed the price from $235/tonne in
2000 to $350/tonne by 2005 but the real interest in it came more recently, when the price soared
to $1,100/tonne in mid-2008. Indonesia then began to speak of overtaking Malaysia in
production terms and enjoying a 21st century oil boom. The oil palm is indubitably the most
productive source of biofuel, yielding about 6,000 litres of oil from a hectare of land, compared
to 446 litres from soybeans and 172 litres from maize. The bubble burst in late 2008, when the
price slumped to $440 by year end. It recovered only in third quarter of 2010 and was at $1,100
by the end of the year.
Since early 2011 the price has been around $1,100. Indonesia still send half its palm oil for
export without processing but there are several groups now planning plants that will produce,
among other items biodiesel. The biodiesel industry of the EU and the USA has little input from
palm oil and outside those areas biodiesel is not an important use of palm oil. In general
prospects for palm oil are more modest than they were two years ago, in the sense that the world
price has stopped rising. Another consideration is that in 2011 the state announced a two year
moratorium on permits for the use of primary natural forest and peatlands. Nevertheless,
Indonesia has arrived at the point where it produces 48 per cent of all palm oil made on the
planet and accounts for 49 per cent of all exported oil. It has two near neighbours that produce
none, India and China. They want the oil desperately and consume 15.5 and 13.5 per cent of the
world total respectively.
The production data from the plantations is shown below.
45
Table 29. Indonesia: Production of Plantation Agriculture Products, 2007-2010

('000 Tonnes)
2007 2008 2009 2010

Palm Oil 11,438 12,478 13,873 14,290
Cane Sugar 2,624 2,668 2,334 2,278
Rubber* 578 586 522 585
Tea 117 115 107 109
Cocoa 69 63 68 71
Coffee 24 28 29 29
* See text below

Much work associated with oil palm plantations is not mechanised, other than the initial ground
clearance. Oil palms can exceed 22 to 31 metres in height; however they are typically removed
from production when they reach 7.5 metres, which coincides with an average age of 25 years.
The 7.5 metre height is an industry limit which is based loosely on the height of the average
human harvester plus the length of the long sickle harvesting pole.
Indonesia harvests about 440,000 hectares of cane for centrifugal sugar, of which almost three-
quarters is on Java. Most of the remainder comes from Sumatra, Kalimantan and Sulawesi.
While a decade ago more than half of Java's cane was irrigated, this area has declined reflecting a
shift to the cultivation of more profitable crops. Nevertheless, sugarcane cultivation in the major
producing islands remains a highly significant economic activity, and covers more than one-third
of the total land area.
About 70 per cent of the sugarcane areas are cultivated by farmers, mostly on small to medium
sized holdings. The remainder is cultivated on sugar factory plantations, both in Java as well as
on other islands where the dominant form of sugarcane cultivation is plantation-style. Farmers
are organized into groups (Kelompok Tani) responsible for at least 20 hectares of land, in order
to coordinate the supply of cane to the mills. Sugarcane areas have increased sharply since the
mid-1970s, when the area was only 116,000 hectares.
Nevertheless the country has to import an equal amount of sugar to that which it produces. It is
trying to become self-sufficient by 2014. Efforts to develop new sugar cane plantations outside
Java have been hindered by the lack of supporting infrastructure, and land ownership problems.
Therefore, the only way to increase production is by growing new plant sugar cane, using higher
quality varieties, and by harvesting the cane only when ready, rather than judging by elapsed
time from planting.
46
Rubber production on plantations is a small part of the total. The country has the largest area of
trees in the world, 3.5 million hectares, 86 per cent exploited by small holders. The total
production is 2.7 million tonnes, so the plantations, as detailed in the table above, make only one
fifth of the production. The producers are targeting production of 3.6 million tonnes in 2015 by
introducing new cloned trees from Malaysia and Vietnam to raise productivity.
Tea production, introduced by the Dutch, is located mostly on Java. The estates are state-owed
as well as private, and produce green tea for the home market and black tea for export. Cocoa is
a stable but not thriving industry. The climate can be adverse, e.g. rain followed by drought in
2010 and the plants are disease-prone, hence the stagnating production.
Java coffee production is centred on the Ijen Plateau, at the eastern end of Java, at an altitude of
more than 1,400 metres. The coffee is primarily grown on large estates that were built by the
Dutch in the 18th century. The five largest estates are Blawan, Jampit (or Djampit), Pancoer (or
Pancur), Kayumas and Tugosari, and they cover more than 4,000 hectares. Java is also a source
of kopi luwak, renowned as the most expensive coffee in the world. On Java, this variety is
produced by feeding captive palm civets with ripe coffee cherries. The digestive tract of the
civet removes the mucilage from the coffee beans.
Agriculture for Food Production
Agriculture has relied traditionally on two distinct methods. In the outer islands swidden
involves clearing a forest area and using it for a few years, recognising its low productivity and
then moving on, allowing the land to revert to forest. In swidden farmers grow cassava, maize,
dryland rice and vegetables. In colonial times the land was also used for rubber and coffee.
Farms are usually between 1 and 3 hectares in area. On the rich volcanic soil of Java farmers
practise sawah, cultivating flooded land. The farms are very small, averaging 0.66 hectares each.
The effects of the 1997 Asian crisis were very serious for farming. Subsidies for fertiliser and
pesticides disappeared, and there was no micro-credit available because of astronomical interest
rates. Irrigation infrastructures were abandoned and mechanisation levels went backwards as old
machinery became unusable. Livestock numbers fell and for a short time there was a severe
crisis in the poultry industry as it could not afford to buy foreign antibiotics. Worst of all, rice
production ceased growing for three years.
47
Table 30. Indonesia: Agricultural Production of Food Crops, 2007-2011

('000 Tonnes)
2007 2008 2009 2010 2011

Rice 57,157 60,325 64,399 66,469 65,741
Maize 13,288 16,317 17,592 18,328 17,629
Soybean 592 776 973 907 844
Peanuts 789 770 777 779 691
Mungbeans 322 298 314 292 341
Cassava 19,988 21,757 22,028 23,918 24,010
Sweet Potato 1,887 1,882 2,058 2,051 2,192
* Estimated output
Rice remains the most important crop. The total land area given over to the cultivation of rice is
12 million hectares. Production has also risen in line with the growing population from
50 million tonnes in 2001 to the biggest harvest ever, of over 66 million tonnes in 2010. The rice
area is 54 per cent irrigated, 35 per cent rainfed and only 11 per cent dryland. High yield
varieties from the Green Revolution era have proved to be the salvation of the country, a huge
part of the population being dependent upon rice. Population growth is also behind the growing
production of cassava and partially of maize, although that is also exported.
EQUIPMENT ANALYSES
MOBILE CRANES
Market Size and Trends
Table 31. Indonesia: Sales of Mobile Cranes by Type, 2007-2011

(Units)
2007 2008 2009 2010 2011

Truck-Mounted Telescopic 5 63 17 27 35
All Terrain 2 2 - - 1
Rough Terrain 14 15 13 10 13
Crawler 8 20 16 12 19
Total 29 100 46 49 68
Note: The above table does not include sales by companies located in Singapore; data represents
only those sales made by Indonesian registered distributors and local Chinese representatives
48
From 2002 to 2005 sales recovered slowly from the effects of the Asian financial crisis in 1997,
reaching a natural maximum of around 50 units in 2005. They then stayed low for two years. In
2008 Chinese cranes arrived in the market in unheard of numbers. Truck cranes are a product
that is now mass produced in China and three manufacturers, Zoomlion, Sany and XCMG all
made major efforts to launch their products in 2006-2007 that brought impressive results. In
crawler cranes the same three manufacturers were successful, as well as the smaller company
Fushun. Although the Chinese products are much less sophisticated than the Western
alternatives, they offer lift capacity at more or less half price. They had a phenomenally
successful year in 2008 but sales of the truck-mounted types fell away again quite rapidly in
2009, as if the available demand was rapidly being satisfied. Results in 2010 and 2011 show that
there is a demand for these low price trucks but it is the crawler types that have really changed
the market. Chinese crawlers are attractively priced at the same time, as Japanese used cranes
have soared in price because of the value of the Yen; new crawler sales are between 20 and
30 units each year.
There are two ways to avoid buying a new crane, the second-hand market and the use of
international or smaller national rental companies. Second-hand cranes have developed strongly
and even dominate in some sectors. In 2004 and 2005, significant numbers of used Japanese
truck-mounted cranes were imported. That flow then ceased temporarily, because of the
worldwide shortage of good used cranes. Now the argument against them is the price.
The rental market is very active. There is currently an oversupply of rental cranes and some
companies are looking to other South-East Asian countries to develop new markets. Singapore
rental companies are very active in Indonesia with the larger companies maintaining permanent
depots in Jakarta. Cranes move easily in the short distance between Singapore, Sumatra and Java
and for the largest cranes it is easier to contemplate bringing them by sea to, say, a mine, a dry
dock or a pulp mill than to drive them across the country’s road system.
The most common truck-mounted cranes have been in the 20, 25 and 30 tonne categories but
since 2006 an energetic importer has been selling 25 and 50 tonne Chinese truck cranes. These
are very keenly priced and if they do not have any notable terrain ability, they are still able to
give good service in built up areas such as Greater Jakarta, or on prepared surfaces such as one
finds in petrochemical plants and oil refineries. They even go to coal mines.
The market for all terrain cranes remains very small, with sales of only two to four units
recorded each year and none in 2009 or 2010. These cranes are mainly used in the oil and gas
industry for platform and refinery work; in 2011 the state oil company Pertamina bought a
49
300 tonne Grove model from Germany. The high price of such cranes is a key factor in slowing
demand in the civil engineering market. By contrast, sales of rough terrain cranes have been
quite steady, mainly underpinned by strong demand from the coal and mineral mines of Sumatra
and Kalimantan. Rough terrain cranes perform essential maintenance tasks and are used in the
repair of large excavators and dump trucks.
Before the wave of Chinese truck cranes, crawler cranes were the most popular type. They can
be used as easily on an urban building site for commercial building construction as in rural areas;
they are also used for piling and foundation work. Many of the local ones are old and would, in
most western markets, be sent to the scrap yard. In Indonesia, their life is prolonged for many
decades. The alternatives are either to call on the international rental companies, which means
the client can have a newer, safe crane on-site, with technology that he can trust; or to buy a
Chinese product at a much lower price.
A significant proportion of new sales are to government agencies which use crawler cranes for
water management and irrigation projects. They are also sold to mining companies and logging
firms.
Production
There is no domestic production of the types of mobile crane covered in this report.
Market Shares
Table 32. Indonesia: Suppliers of Mobile Cranes and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Units % Units % Units % Units % Units %
XCMG 10 34 23 23 17 37 20 41 28 41
Sany 3 10 23 23 9 20 5 10 17 26
Zoomlion - - 35 35 6 13 14 29 6 9
Link-Belt - - - - - - 1 2 6 9
Tadano 5 17 5 5 6 13 5 10 5 7
Hitachi-Sumitomo - - - - - - - - 3 4
Grove 4 14 7 7 3 7 4 8 3 4
Terex 2 7 2 2 4 9 - - - -
Fushun - - 2 2 1 2 - - - -
Liebherr 3 10 1 1 - - - - - -
Kobelco 2 7 2 2 - - - - - -
Total 29 100 100 100 46 100 49 100 68 100

50
In the main, the Japanese manufacturers showed the best sales performance up to 2007, with
European and North American competitors being put at a disadvantage by the appreciation of the
euro and the dollar. Then the Chinese started to make an appearance, with a presence that will
surely grow in the future. In unit terms the largest seller of the last three years by a big margin is
Gaya Makmur tractors, selling XCMG cranes. Most of those sales are 50 and 25 tonne
truck-mounted cranes but a few are 50 tonne crawlers. Sany and Zoomlion sell direct, with a
bias to the truck-mounted type, where Chinese machines are the only ones present. Then come
the American rough terrain cranes of Link-Belt of the USA, whose dealer Traktor Nusantara is
also responsible for the three Hitachi-Sumitomo units sold in 2011. It thus overtook Tadano,
which has the best dealer in the country behind it, namely United Tractors. Its cranes have a
strong market share in rough terrain markets and are quite highly priced but both sectors are
small, so the unit numbers are still low.
Japanese manufacturers have not done well in the last three years. Representation is erratic, but
recently Hitachi-Sumitomo has found a dealer and made some sales. Kobelco, on the other
hand, linked up with the importer selling the hydraulic excavators of that brand but found no
success. Indotruck has not kept up the link with the Fushun crawlers since it stopped selling the
LiuGong range and devoted its resources to Volvo construction equipment.
In the mobile crane market, enthusiasm for selling new cranes is patchy. It is not automatic that
an importer specialising in construction equipment will want to involve itself with mobile cranes.
Kato currently has no dealer and although Tadano is among the leading suppliers thanks to its
relations with United Tractors, and Grove is an effective force in the market, neither sells more
than five cranes per year. Grove maintained a presence throughout the difficult years of the late
1990s and early 2000s. Most of Grove’s customers are in the oil, gas and mining sectors and
though not immune from recession, these end-users have continued to purchase mainly rough
terrain cranes from Grove throughout this period.
Table 33. Indonesia: Distribution Networks of Suppliers of Mobile Cranes, 2012
Manufacturer Distributor
Grove Altrak 1978
Hitachi-Sumitomo Traktor Nusantara
Liebherr Liebherr Indonesia
Link-Belt Traktor Nusantara
Tadano United Tractors
XCMG Gaya Makmur Tractors
Source: Company Information
51
Liebherr was relatively successful after 2003, with sales concentrating on the mines of
Kalimantan, where Liebherr has based its sales operations. Recent sales, though, have been few
and far between.
Population and End-Users
As with the last study in 2010, the number of cranes in operation is estimated at 1,000, with 70 er
cent of them being crawler cranes, working in the logging, oil and construction industries.
Significant numbers are used in mining for clearing forests in preparation for removal of
overburden.
Crawler cranes are used in logging and timber processing. Mobile truck cranes are mainly used
in the major cities and in ports for loading and unloading of barges and coastal vessels. The most
common size of truck cranes is 20 to 30 tonnes. The only new sales of all terrain cranes recently
seem to have been made to Pertamina, the state oil and gas company.
Rental is significant in the urban areas with an estimated 30 per cent of mobile cranes in the
greater Jakarta area being in the rental market. Crane rental companies from Singapore are very
active in this area, particularly for the larger crawler cranes (over 100 tonnes) used in lifting of
heavy machinery. Companies like Tiong Woon and Tat Hong are present, although Mammut has
exited in favour of locating its fleet in the Middle East.
Forecast
Table 34. Indonesia: Forecast Sales of Mobile Cranes by Type, 2012-2016

(Units)
2012 2013 2014 2015 2016

Truck-Mounted Telescopic 40 50 50 50 60
All Terrain 3 5 5 5 5
Rough Terrain 15 20 30 30 30
Crawler 25 30 30 40 40
Total 83 105 115 125 135
The results of 2010 and 2011 indicate, as predicted, that even in a time of good economic growth
and with certain factors such as the mining and plantation expansions pushing demand upwards,
this is still only a modest market for new mobile cranes. By and large the suppliers, and those
52
who would be their commercial agents are both fairly sure that there is not much potential to sell
new cranes in Indonesia.
The second factor is the modest pace of infrastructural development. There are some substantial
civil engineering projects in prospect, such as the building of coal fired power stations, but the
government cannot agree on how to prioritise other investments where cranes will be needed,
such as the modernisation of ports, the building of new toll roads (held up by disagreements over
land) and new liquefied gas installations. Many new and exciting capital projects are discussed,
but there is less certainty that work will actually begin in the short-term.
On the positive side, the existence of a recognised GDP growth rate in 2012 around 6.0 per cent
and the prospect of the next few years enjoying GDP growth around 6.5 per cent are very
positive for investment. Construction projects will need cranes and one can see good demand if
the toll roads are built, the cement industry does make the investments mentioned in the Forecast
Assumptions section of this report and the private sector in general holds its nerve. One aspect
that is new in 2012 (and by no means guaranteed to last) is a boom in residential construction
that allows crane rental companies much better utilisation of their trucks to assemble tower
cranes. Mining investment will be very supportive, as will the programme to build more power
station capacity and the building of rigs for the offshore oil exploration industry.
The doubt remains, however, as to the viability of operating mobile cranes on the road system of
the country. International rental companies would still rather base their cranes outside the
country and then bring them in for the big projects. The country is, after all, a place of 992
inhabited islands and the use of sea transport is quite natural. The result will be that all terrain
cranes running on highways will continue to be a rarity, and equally that much of the crawler
crane capacity will be provided from outside by crane hirers. Chinese truck cranes now have a
place, since they provide lift capacity at a cheap price but whether their numbers will grow
massively is doubtful. The potential for sales of new rough terrain cranes will still be restricted
by the free supply of older units from Japan, where they are the most common form of cranage.
Machines Available
The table below shows the mobile cranes available in 2012 through distributors registered in
Indonesia. It thus excludes the Chinese products where no official importer has been appointed.
In the engine data, cranes with two engines have them noted in the order of superstructure, and
then their carrier.
53
Table 35. Indonesia: Mobile Cranes Available, 2012
Max Lift
Capacity Engine Product
Manufacturer/Type Model (Tonnes) HP Manufacturer Source
Truck Lattice
Liebherr LG1550 550 402+563 Liebherr Germany
LG1750 750 544+598 Liebherr Germany
Truck Telescopic
Link-Belt HTC-8640SL 36.2 365 Caterpillar USA
HTC-8660 Series II 45.3 365/395 Caterpillar USA
HTC/HTT-8675 Series II 70.0 445 Caterpillar USA
HTC/HTT-8690 81.6 365 Caterpillar USA
XCMG QY50K 50 280 Dongfeng Steyr China
Rough Terrain
Grove RT525E 25 152 Cummins USA
RT535E 35 152 Cummins USA
RT700E 50-55 240 Cummins USA
RT875C 70 275 Cummins USA
RT9100 90 275 Cummins USA
Link-Belt RTC8030 Series II 27.2 152 Caterpillar USA

RTC8050 Series II 45.3 174 Caterpillar USA
RTC8075 68.0 235 Caterpillar USA
RTC80100 Series II 90.7 330 Detroit Diesel USA
Tadano GR-300EX 30 175 Cummins Japan

GR-550EX 55 272 Mitsubishi Japan
GR-700EXL 70 225 Mitsubishi Japan
All Terrain
Grove GMK2035E 35 290 Mercedes-Benz Italy
GCK3045 45 442 Hino Japan
GMK3050-1 50 313 Mercedes-Benz Italy
GMK3055 55 348 Mercedes-Benz Germany
GMK4080-1 80 389 Mercedes-Benz Germany
GMK4100/L 100 147+396 Mercedes-Benz Germany
GMK5095 95 147+509 Mercedes-Benz Germany
GMK5110-1 110 175+517 Mercedes-Benz Germany
GMK5130-1 150 177+510 Mercedes-Benz Germany
GMK6220-L 220 163+563 Mercedes-Benz Germany
(continued)
54
Table 35. Indonesia: Mobile Cranes Available, 2012 (continued)
Max Lift
Liebherr LTM 1030-2.1 35 275 Mercedes-Benz Germany
LTM 1040-2.1 40 275 Mercedes-Benz Germany
LTM 1050-3.1 50 362 Liebherr Germany
LTC 1055-3.1 55 469 Liebherr Germany
LTM 1090-4.1 90 194+469 Liebherr Germany
LTM 11200-9.1 1,200 322+670 Liebherr Germany
Link-Belt ATC-3200 160 185+523 Mercedes-Benz Germany

ATC-3250 220 188+530 Mercedes-Benz Germany
Tadano Faun ATF 40G-2 40 279 Mercedes-Benz Germany

ATF 50G-2 50 326 Mercedes-Benz Germany
ATF 60-3 60 326 Mercedes-Benz Germany
ATF 65-G4 65 123+394 Mercedes-Benz Germany
ATF 90G-4 90 175+428 Mercedes-Benz Germany
Crawler Lattice
Hitachi-Sumitomo SCX300 30 147 Hino Japan
SCX400 40 147 Hino Japan
SCX500 50 177 Isuzu Japan
SCX800 80 284 Mitsubishi Japan
6000SLX 550 532 Isuzu Japan
(continued)
55
Table 35. Indonesia: Mobile Cranes Available, 2012 (continued)
Max Lift
Liebherr LR 1350/1 350 362 Liebherr Germany
LR 1400/2 400 402 Liebherr Germany
LR 1600/2 600 503 Liebherr Germany
LR 1750 750 536 Liebherr Germany
LR 11350 1,350 872 Cummins Germany
XCMG QUY50 50 156 Dong Feng China
MINI EXCAVATORS
The effort to sell mini excavators met with no success at all before 2008. As a measure of the
difficulty one can point to the mere 25 units sold new from 2002 to 2007. The reason is the
abundance of cheap labour. Underground utilities are limited in scale and size, and
communications and power lines are mainly over ground. With unskilled manual labour
available at $4 a day, there is no pressing need for mini excavators and perhaps greater social
pressure to employ as many labourers as feasible.
Table 36. Indonesia: Sales of Mini Excavators, 2007-2011

(Units)
2007 2008 2009 2010 2011

5 23 80 135 130
The first breakthrough in finding a valid application came in 2009, when Daye Kobelco targeted
central Kalimantan where the population is sparse (29 people per km2) but corporations are keen
to develop plantations. It offers the 4.6 tonne machine to clear the ground round the palm trees
and to make access roads for harvesting. In more populous regions the plantation would use
manual labour but there the mini excavator is a better option.
That, however, is the only major success seen. A couple of importers are finding in 2011 and
2012 that promoting them pays back in a meaningful way but it is still matter of single units per
56
month. About 10 per cent of the market is in smaller 3.5 tonne types for construction but most of
the sales are of 4.5 and 5.5 tonne sizes. Most companies selling mini excavators are also selling
full size excavators, which attract more interest and more profit per unit.
Production
There is no domestic production of mini excavators.
Market Shares
Table 37. Indonesia: Suppliers of Mini Excavators and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Kobelco 2 40 5 22 68 85 110 81 75 58
Hyundai - - - - 2 3 - - 21 16
Caterpillar 2 40 14 61 2 3 8 6 14 11
Komatsu - - 2 9 6 8 17 13 13 10
Hitachi 1 20 - - - - - - 7 5
Bobcat - - 2 9 2 3 - - - -
Total 5 100 23 100 80 100 135 100 130 100
Kobelco is known for marketing efforts that are unconventional and its campaign in central
Kalimantan has done well. Plantations use the machine to clear the ground round the palm trees
and to make access roads for harvesting. In fact the original mini excavators of more than
30 years ago began in groundwork on farms, albeit in a different form of farming, namely paddy
rice. Second in 2011 came the smaller dealer Swadaya, which markets the Hyundai line, with
particular emphasis on the 5.5 tonne model, a long term favourite in Korea. The Komatsu dealer
United Tractors has put the product line into its Bina Pertiwi subsidiary and is marketing the
product but with only a very modest success, while Caterpillar did better in the plantation market
in 2008 and 2011. Hitachi was selling a few units, but again the larger excavators are the main
emphasis for the company.
57
The short list of suppliers below shows how many players simply abstain from trying the market.
Table 38. Indonesia: Distribution Networks of Suppliers of Mini Excavators, 2012
Bobcat Intraco Penta
Caterpillar Trakindo Utama
Hitachi Hexindo Adiperkasa
Hyundai Swadaya Traktor
JCB Altrak 1978
Kobelco Daya Kobelco
Komatsu Bina Pertiwi
Takeuchi GM Tractors
Xiagong Oscar Mas
Yanmar Tatindo
Two introductions are underway in mid-2012. Gaya Makmur Tractors, which sells large
volumes of Chinese construction equipment, has stocked some Takeuchi units; and the new
sales organisation for Sumitomo excavators, Tatindo, has decided to complete the line with
Yanmar mini excavators.
The overall number of new mini excavators in operation has quickly gone from 100 to 450 units.
That market for new machines in construction is very small compared to that for imported
second-hand units, mainly from Japan and so the total population must be reckoned at about
1,000 units. Kobelco and Yanmar are the most common second-hand brands. Most used units
are operating in the rental market serving construction.
About half the population of the machines less than five years of age is working in the
plantations, being the machines sold in 2008-2011. Agriculture accounted for 80 per cent of
sales in those two years.
Forecast
The sales of 2010 and 2011 were about 250 per cent of what seemed logical at the time of the last
report. They have been the consequence of a very particular situation, the Kobelco volume going
into plantations. Other competitors saw them as a unique case in 2009, not exactly in a far-off
country but certainly in a region that has special conditions. However sales went to a peak of
58
110 units and back to a solid 70 machines in 2011. For volumes to grow very much in today’s
market conditions would require a coincidence of expanding oil palm areas and their occupation
by owners/operators who would rather use mini excavators than manual labour for groundwork.
Table 39 Indonesia: Forecast Sales of Mini Excavators, 2012-2016

(Units)
2012 2013 2014 2015 2016

120 100 120 150 200
This is not the usual method of working a new plantation. Oil palm is usually taken on by
communities that are just eking a living off rubber cultivation, subsistence rice farming, and fruit
gardens. When a large agricultural firm enters an area, community members are often eager to
become part of an oil palm plantation. Lacking legal title to their land, deals are often structured
so that members of the community acquire 2-3 hectares of land for oil palm cultivation. They
typically borrow some $3,000-6,000 (at 30 per cent interest per year) from the parent firm for the
seedlings, fertilizers, and other supplies. Because oil palm takes roughly seven years to bear
fruit, they work as day labourers at $2.50 per day on mature plantations. Once their own
plantation becomes productive, the average income for a 2 hectare allotment is $682-900 per
month. The low level of income combined with large start-up costs and relatively high interest
payments virtually ensures that small holders will be perpetually wishing to offer their labour to
the oil palm company. One cannot therefore imagine a wholesale adoption of mechanised
working across the industry.
There is no indication that mini excavators may become marginally more popular in the
immediate future in construction, since the cheap labour supply is not disappearing at all. The
forecast assumes that construction will take up the machine progressively but very modestly and
that perhaps some modest rental industry will emerge.
59
Machines Available
Table 40. Indonesia: Mini Excavators Available, 2012
Service
Engine Weight Product
Manufacturer Type Model HP Manufacturer (Tonnes) Source
Bobcat Standard E10 10 Kubota 1.2 USA
E14 13 Kubota 1.3 USA
Caterpillar Standard 301.6C 18 Caterpillar 1.7 Japan

301.8C 18 Caterpillar 1.8 Japan
302.5C 25 Caterpillar 2.9 Japan
Zero Tailswing 303C CR 30 Caterpillar 3.3 Japan
303.5C CR 39 Caterpillar 3.7 Japan
304CR 42 Caterpillar 4.8 Japan
305C CR 48 Caterpillar 5.2 Japan
Hitachi Zero Tailswing ZX10U-2 12 Yanmar 0.9 Japan

ZX17U-2 15 Yanmar 1.9 Japan
ZX27U-3F 26 Yanmar 2.8 Japan
Hyundai Standard R55-7A 53 Yanmar 5.7 Korea
JCB Standard Micro/Micro Plus 17 Perkins 0.8 UK

8015 18 Perkins 1.6 UK
802 Super 32 Perkins 2.5 UK
803 Plus/Super 26 Perkins 3.0 UK
Kobelco Zero Tailswing SK10SR 8 Yanmar 1.0 Japan

SK20SR 21 Yanmar 2.2 Japan
(continued)
60
Table 40. Indonesia: Mini Excavators Available, 2012 (continued)
Service
Manufacturer Type Model HP Manufacturer (Tonnes) Source
Kobelco SK27SR 21 Yanmar 2.6 Japan
(continued) SK30SR 28 Yanmar 3.1 Japan
Komatsu Zero Tailswing PC20MR-2 21 Komatsu 2.2 Japan

PC30MR-2 28 Komatsu 3.1 Japan
PC40MR-2 39 Komatsu 4.8 Japan
Takeuchi Standard TB108 8 Yanmar 0.8 Japan

TB014 12 Yanmar 1.4 Japan
Zero tailswing TB23R 19 Yanmar 2.6 Japan

TB128FR 23 Yanmar 3.2 Japan
Xiagong Standard XG 804 35 Yanmar 4.0 China

XG 806 48 Yanmar 6.0 China
Yanmar Zero tailswing ViO10 12 Yanmar 1.1 Japan

ViO20 19 Yanmar 2.2 Japan
HYDRAULIC EXCAVATORS
Sales of excavators far exceed any other type of construction equipment reviewed in this report,
and accounted for 56 per cent of all machines sold in 2011, compared to 44 per cent in 2006 and
55 per cent in 2009.
61
Table 41. Indonesia: Sales of Hydraulic Excavators, 2007-2011

(Units)
2007 2008 2009 2010 2011

Wheeled 5 5 5 5 3
Crawler 4,350 6,528 4,882 8,012 12,800
Total 4,355 6,533 4,887 8,017 12,803
The development of the use of hydraulic excavators came relatively late to the country. The
watershed was in 1990, when sales reached 1,170 units, a time of exciting development in the
extraction of minerals and metal ores. Sales increased steadily, reaching 3,000 units in 1996.
The success is partly attributable to the starts in local manufacturing by Caterpillar (1987),
Komatsu (1992) and Hitachi (1993). They strongly promoted the concept (against the bulldozer)
and engaged the support of government departments, who underpinned local manufacture with
substantial orders for infrastructure and drainage projects. The market was further stimulated by
other suppliers coming into the market, particularly Korean manufacturers.
After 1997, the market collapsed. Manufacturing was slashed, although capacity was maintained
for the eventual upturn in demand, which began in 2001. The market then began an ascent that
was broken only briefly in 2009, powered by the rapid increase in coal mining, the needs of the
forestry industry and the opening up of land for oil palm plantations. The locally produced
machine of 20 tonnes was not completely dominant but it did supply a large part of the market,
around 50 per cent each year and was significantly cheaper than imported types. It became an
ideal tool for the type of sub-contractor who was willing to work on any land clearance operation
or on jobs in the steadily growing construction industry.
With the exception of a handful of units, all sales of excavators are of the crawler type, since the
nature of the terrain does not facilitate the use of wheeled excavators. Also, excavators are
moved around on flat bed lorries from site to site, and as the distances can be considerable, the
crawler excavator option is probably most suited to the country’s needs. The cost of crawler
excavators, produced locally in large volumes, creates a price advantage over wheeled excavators
of 15-18 per cent.
The soft nature of the ground means that crawler excavators are sold in a variety of undercarriage
versions. Wide or long crawler undercarriages are available, particularly for forestry and
drainage work.
62
Table 42. Indonesia: Sales of Crawler Excavators by Weight Category, 2007-2011
Weight 2007 2008 2009 2010 2011

(Tonnes) Units % Units % Units % Units % Units %
8-12 348 8 585 9 450 9 450 6 615 5
12-19 44 1 80 1 120 2 350 4 630 5
19-21 3,132 72 4,138 63 2,692 55 4,387 55 7,238 57
21-24 86 2 285 4 700 14 1,160 14 1,365 11
24-33 305 7 680 10 410 8 820 10 1,445 11
33-50 261 6 430 7 325 7 615 8 1,110 9
Over 50 174 4 330 5 185 4 235 3 400 3
Total 4,350 100 6,528 100 4,882 100 8,017 100 12,803 100
There has been a shift in the demand profile in the excavator market with more emphasis on
larger machines, compared to earlier times. This is a consequence of the increase in coal mining
and other mineral extraction activities, and some mines are suffering from capacity problems,
which can only be solved by re-equipping them with larger excavators. Sales of 45 tonne
crawler excavators were in 2011 four times as high as in 2007, and 33 tonne models sell even
better. However, for the general construction, agricultural and logging sectors, the most popular
sizes of excavator remain as before.
The 19-21 tonne category occupied 57 per cent of the market in 2011, compared with just under
80 per cent of the market from 2002 to 2006 inclusive. These machines are sold with bucket
capacities of 0.8 m² and 1.2 m², and are priced at between $85,000-$100,000. This is a
substantial reduction in price compared to 10 years ago, when the same excavators were selling
for up to $125,000. The fall in prices is partly due to competition between the local
manufacturers but the situation was exacerbated by the entry of Korean excavator manufacturers,
whose products were lower priced. Since 2009, however, a number of machines just over
21 tonnes have gone onto the market, and in 2011 the four models concerned accounted for
11 per cent of the market.
The other characteristically Indonesian machine has been the 11 tonne class, in the past well
supported by locally assembled machines. The business has, however, moved on. Caterpillar
and Komatsu no longer produce such machines in Indonesia. Hitachi still produces two models
in this category locally, the Zaxis 110M at 10.7 tonnes and the Zaxis 110MF at 11.5 tonnes. The
designation ‘M’ denotes Mud; ‘MF’ denotes Mud and Forestry, for applications in swampy areas
where a long undercarriage is needed. These machines are normally used in agricultural,
63
irrigation and plantation applications where the larger 20 tonne machines are unsuitable and the
only new machine now available is the Hitachi product.
Looking past the 24 tonne market, one can see that the 33 tonne class has also done very well
since 2007, with machines going one-third to construction and two-thirds to mining. Over
33 tonnes sales tripled between 2005 and 2008, all of the growth coming from the mining
business; they then doubled again by 2011. In this group the leading size is 40-50 tonnes, which
accounts for half of all sales in unit terms, followed by the 33 to 40 and 66 to 90 tonne classes,
with 15 per cent each. The rest is fairly evenly distributed. No fewer than 40 excavators over
200 tonnes were delivered to the mines in 2008 and again in 2009, but in the two subsequent
years that subsided to 10 units in each year.
Production
Early tariff protection stimulated local production and brought about the level of investment
necessary to produce excavators in adequate volumes to produce financial returns for the
investors. All three domestic manufacturers seriously reviewed their positions in the late 1990s,
after the collapse of the Rupiah and of demand in the construction equipment market. Wisely,
they have all kept their local production facilities, even though Caterpillar has recently scaled
back its involvement. There is a real air of optimism in the local industry that, provided there are
no further major financial or government crises, the domestic market will continue to grow and
local manufacturers are best placed to satisfy the expected bourgeoning demand.
The other beneficial effect of local excavator manufacture is the stimulus it has given to other
companies who have grown up around the three major manufacturers, to support local production
and to supply the essential spares. Japanese companies, associated with Komatsu and Hitachi in
Japan, are the most conspicuous and have invested substantially in local production facilities.
Table 43. Indonesia: Production of Crawler Excavators by Manufacturer, 2007-2011

(Units)
2007 2008 2009 2010 2011

Hitachi 1,741 1,860 1,709 2,150 2,500
Komatsu 1,000 1,400 1,000 2,100 2,100
Caterpillar 480 770 110 570 1,100
Sumitomo HI - - - - 60
Total 3,221 4,030 3,179 4,820 5,760
64
Hitachi is the largest producer of crawler excavators. Whereas Komatsu and Caterpillar have
diversified their production range, Hitachi has chosen to concentrate on manufacturing four
models: two versions of the popular 11 tonne ZX110 excavator, and two versions of the 20 tonne
ZX200 model.
Hitachi Construction Machinery Indonesia has a single large manufacturing facility at Cibitung
in the west of Java, having just sold its Bekasi fabrication, welding and painting factory to
Ohgishi Co. The Cibitung plant buildings have been extended by 50 per cent since 2010. This
brings an expanded production capacity, now raised to 3,300 excavators.
Komatsu builds four models from 20 to 44 tonnes. Recently, excavator production has reduced,
as most of the production of the PC200 model moved to Thailand in 2007 for the Series 8, with
the Jakarta factory now producing the Series 7 versions only and concentrating on 30 and
40 tonne models. The Komatsu factory is committed to substantial orders to provide excavators
for contractors working in the coal mines in Kalimantan (the Komatsu dealer’s parent has
invested substantial marketing efforts in the contracting business). This dual relationship of
being both manufacturer and customer does not seem to have harmed its standing in the market,
but has put more pressure on rivals Hitachi and Caterpillar.
Caterpillar has dropped production of the 311 crawler excavator of 12 tonnes and suspended
production of the model 320 of 20 tonnes in 2008, only to reinstate it in 2010. 2009 was a very
poor year, with the domestic market very weak and some machines being sourced from China,
instead of locally. The 2010 production restored the throughput to the former levels and output
grew well in 2011.
Sumitomo is the latest manufacturer to build an excavator plant in the country. Sumitomo
(S.H.I.) Construction Machinery Co. Ltd has built during the first half of 2011 a plant in
Karawang, 60 kilometres east of Jakarta. The 10 hectare site is home to an assembly facility
with a planned capacity of 1,000 crawler excavators per year, based a projected programme of
four models, of 12, 21, 24 and 35 tonnes. The 200 employees produced 60 units between
September and December 2011. In the first half of 2012 they built 540 units and so should
achieve 1,000 units in 2012.
All three producers work within the context of allocating regional production resources.
Inevitably, there are always possible alternatives to producing inside Indonesia, with Thailand
being favoured over Indonesia since 2008 by Komatsu and Kobelco for expansion of their
65
production capacity. China and India are possibilities for Caterpillar, while Japan is an obvious
alternative for all the three local producers if they wish it.
On the other hand, Indonesia has strengths as a location for component fabrication, beyond the
confines of the hydraulic excavator, and the prosperous local market will aid the country in
keeping these production resources alive. Obviously the presence of companies like Ohgishi,
Shibaura Shearing and Katsushiro is positive all-round.
Component Sourcing
Table 44. Indonesia: Component Sourcing for Crawler Excavators, 2012
Caterpillar Hitachi
Diesel Engines MHI Japan Isuzu
Transmissions Caterpillar Akashi, Japan Hitachi Japan
Hydraulics Caterpillar Jesi, Italy Hitachi Japan
Chassis In-house In-house
Frames In-house In-house
Undercarriages Asia Trak, China In-house
Running Gear Asia Trak, China Topy Japan
Cabins Press Kogyo Japan Japan
Buckets In-house In-house
Komatsu Sumitomo
Diesel Engines Komatsu Japan Isuzu
Transmissions Komatsu Japan Toshiba
Hydraulics Komatsu Japan Kawasaki, Toshiba
Chassis In-house Local subcontractors
Frames In-house Local subcontractors
Undercarriages Komatsu Undercarriage Indonesia Local subcontractors
Running Gear Komatsu Undercarriage Indonesia Local subcontractors and Japan
Cabins Local sub-contractor SHI Japan
Buckets Komatsu Patria Attachment Local subcontractors
Substantial component manufacture now takes place locally. All three manufacturers import the
essential engine, transmission and hydraulic parts. Booms and structural steelwork are either
fabricated in-house, or purchased from local sub-contractors. Perhaps the most notable steel
component manufacturer is PT Katsushiro Indonesia, a wholly owned Japanese company which
makes a substantial proportion of the buckets and wear parts for Komatsu and Caterpillar. The
factory, on the outskirts of Jakarta, is equipped with state-of-the-art metal cutting equipment,
including computer controlled plasma and laser cutting machines, nine heavy metal presses and
six metal sheet rolling machines. Banshu Electric Indonesia is a joint venture between Banshu
Electric Equipment Co. Ltd of Japan and PT Askara Internal, an Indonesian company. First
66
established to serve the automotive assembly market in Indonesia, Banshu Electric is supplying
complete wiring harnesses to the leading excavator manufacturers. Shibaura Shearing, a
subsidiary of Hitachi, has a branch on the nearby MM 2100 industrial estate that does cutting and
fabrications. Ohgishi Co. has owned the former Hitachi plant at Bekasi and undertakes
fabrication, welding and painting for the Cibitung operation. Clearly it will also be looking for
other clients in the longer term.
Caterpillar makes much of the structural steelwork including chassis, booms, frames and covers
for engines and radiators. The plant uses first materials provided by local vendors, so that it does
not cut the plate needed but does a large amount of welding. In addition, the company uses more
than 20 outside contractors for components such as seats, air conditioning units, wiring harnesses
and different sizes of buckets. More than 50 per cent of components are sourced from Japan,
including the Caterpillar engines made by MHI.
Hitachi has all the main welded steel elements made locally, some in the factory. This includes
frames, track frames, booms, and fuel and oil tanks. Seats, cabs and batteries are also supplied
by local manufacturers. It makes components for other company plants, led by those for
excavators from 45 to 800 tonnes. At present it makes the front mounting for the boom as well
as the boom itself. The other major part made is the undercarriage. It made approximately 1,000
side frames for excavators from 45 to 190 tonnes before the facilities expansion and 120 frames
for excavators from 190 to 800 tonnes. The capacity has been 7,000 tonnes per year. The
company has always made other engineering products. These include dump bodies, stainless
steel structures, transformer housings, heat exchangers, boilers and even car park systems.
Komatsu has two foundries in Indonesia and steel cast components are destined for both local
and export markets. The foundry makes buckets, boom points, cases, sprockets and bosses. For
hydraulic excavators the plant also makes revolving and track frames.
Sumitomo is at the stage where the majority of steel structural parts, chassis and frames are
made in Indonesia by suppliers such as PT Katsushiro. Engines are from Isuzu Japan. The SHI
plant in Chiba, Japan supplies the cab at present but that could change. The Kawasaki pumps
come from Japan, as do the motors of Toshiba and others.
Exports
Exports of crawler excavators have in general disappeared, for since the recovery of the local
market all production has been devoted to the domestic clientele. To an extent, there is a
67
problem that the country does not demand that engines correspond to the latest emissions norms
and so the products made for this market are somewhat behind in technology. Manufacturers are
worried about the fuel quality in Indonesia, so they stay with the simplest technology possible.
As a result, other locations will spring to mind first when international manufacturers are
examining the question of sourcing. The exception is Hitachi, which sells to ASEAN neighbours
and New Zealand.
Market Shares
The market for crawler excavators is portrayed as the most competitive in the industry, but in
reality it is not so. The leading three suppliers control more than 80 per cent of the market,
compared to only 43 per cent in China or 41 per cent in Western Europe. The Korean
manufacturers in the mid-1990s tried to penetrate the market with prices that were as much as 30
per cent lower than established domestic competition but they faded and now command three per
cent market share each. There was a serious struggle around prices, which have never recovered
since that time. The previous yardstick of $125,000 for a 20 tonne machine no longer has
relevance, with the lowest prices for imported 20 tonne excavators at $85,000.
Table 45. Indonesia: Suppliers of Crawler Excavators and

Their Market Shares, 2008-2011
2008 2009 2010 2011

Units % Units % Units % Units %
Komatsu 2,270 35 1,839 38 2,850 36 4,400 34
Hitachi 1,617 25 1,275 26 2,170 27 2,550 20
Kobelco 1,018 16 885 18 1,500 19 1,950 15
Caterpillar 1,108 17 591 12 770 10 1,300 10
Hyundai 160 2 120 2 240 3 780 6
Volvo 66 1 82 2 200 3 600 5
Doosan 142 2 70 1 250 3 650 5
Sumitomo 15 - - - - - 370 3
Keihatsu - - - - - - 100 1
JCB 119 2 13 - 18 - 82 1
LiuGong 13 - 7 - 14 - 18 -
Total 6,528 100 4,882 100 8,012 100 12,800 100
In 2011 the tsunami that struck Japan in March caused serious problems for Japanese
construction equipment producers and normality did not return until August in their home plants.
Hitachi and Kobelco were particularly affected but by the accident of geography Komatsu was
68
less afflicted. Sales volumes delivered were much affected in the case of the first two and their
performance was weakened for that sole reason.
Komatsu appears to be growing stronger in all sectors of the excavator market, and its overall
market share increased from 28 per cent in 2001 to 32 per cent in 2006 and to a peak 38 per cent
in 2009. Its main strength is the PC200 which accounts for 60 per cent of units sold. Komatsu’s
strength is based on its superb sales and service network which consists of 18 branch offices, 17
site-support offices and 12 representative offices. In the key mining areas of Kalimantan and
Sumatra, Komatsu maintenance teams at the largest mines offer a 24 hours a day and 365 days a
year service for excavators and other equipment.
Hitachi has kept its market share at or very near the level of 26 per cent for the whole of the past
decade, until it lost delivery ability temporarily in 2011. Approximately 60 per cent of Hitachi’s
unit sales are of its 20 and 21 tonne models ZX 200 and 210. In the rest of the market it is very
strong in the 11 tonne size (nearly 100 per cent market share) but its imported mining excavators
from 30 tonnes upward are outsold by Komatsu in the ratio of 3 to 1. In mining excavators over
100 tonnes it did very well, with 50 to 55 machines sold and installed each year from 2009 to
2011, thanks to greater production capacity back in Japan but again its main rival sold three
times as many.
Kobelco is one of the success stories of the last five years, and is an example of how careful
target marketing can win market share, even from established players. It rose from 11 per cent in
2005 to 18 per cent in 2009, the year when it overtook Caterpillar. After gaining one point in
2010 it had bad luck in 2011 with tsunami delaying deliveries. Kobelco has attracted customers
in diverse geographical locations where perhaps Komatsu, Hitachi and Caterpillar are not so
active. Furthermore, it has sought out small owner-operators that might have been overlooked by
the major suppliers. In 2008 it opened a large new warehouse and workshop in Cibitung, where
it adds counterweights and buckets to the imported machines there. This has led to the
misconception that it manufactures locally. In reality its important SK200 model (85 per cent of
the volume) comes from Thailand, with some products also coming from Japan. It is a sign of its
maturity that it has just opened a used construction equipment centre in Jakarta, as its obligations
in machines traded in have grown hugely.
Caterpillar has lost market share to Komatsu, whose aggressive marketing stance and keener
prices have won over former Caterpillar users and to Hitachi, which has a very high reputation
for technical excellence. Caterpillar’s market share has fallen from 27 per cent in 2002 to 18 per
cent in 2006, 12 per cent in 2009 and 10 per cent now. In the 20 tonne class it has declined from
69
17 to 14 per cent since 2009 and above 30 tonnes it has little success against Komatsu in the
mines.
Any of the four suppliers so far named can lay claim to having been affected by the 2011
tsunami; and now we come to suppliers who did better at their expense. Doosan and Hyundai
are still present in the market, but they are not the forces they were in the mid to late 1990s. In
normal years the four leading brands of excavator can offer high levels of parts and service
which is just not possible for companies with a small market share. Furthermore, the destiny of
minor players in the excavator market is controlled by distributors who, in the main, are selling a
broad range of construction equipment products. This structure is typical for Indonesia, but
cannot provide the same level of strong focused marketing provided by the market leaders.
Volvo was in that position, with its distributor, PT Intraco Penta, a powerful force in the market
but with many different interests, mostly outside pure construction. As a result in 2012 it is
using a second dealer in some of the main islands, its truck dealer Indotruck. The profile of the
latter company at the end of this report explains more.
JCB wanted to increase its sales of excavators and launched them alone through the small
importer United Equipment Indonesia. The link lasted two years and in 2008 it managed 119
sales of the Indian-made 20 tonne machine. In that year it also chose a new dealer to cover the
whole range, Altrak 1978, hence the disruption to sales when Altrak started in early 2009. By
2011 it was beginning to make an impact and reached a total just above the level of 1.0 per cent
of the 21 tonne class.
The list of suppliers is quite short by international standards.
Table 46. Indonesia: Distribution Networks of Suppliers of Hydraulic Excavators, 2012
Manufacturer Distributor Manufacturer Distributor

Caterpillar Trakindo Utama Liebherr Liebherr
Doosan Kobexindo LiuGong Panca Traktor
Hitachi Hexindo Adiperkasa Sany Satrindo Utama
Hyundai Swadaya Traktor; Oscar Mas Sumitomo Tatindo Hexaprima
JCB Altrak 1978 Volvo Indotruck Utama, Intraco Penta
Keihatsu Gaya Makmur Tractors XCMG Gaya Makmur Tractors
Kobelco Daya Kobelco Zoomlion Pusaka Andalan Perkasa
Komatsu United Tractor
70
There is so far very little sign of Chinese excavators. Although Chinese companies made
167,000 hydraulic excavators in 2011, most of them went to the huge home market. Chinese
manufacturers would dearly love to establish themselves but their prime asset is wheeled loaders
and as the relevant section will show, there is a limited potential for loaders in Indonesia.
Therefore they find it difficult to gain a foothold in the market.
The first success in this product area is the giant LiuGong company, which found a good outlet
in Indotruck but sold only 30 units before it lost it in 2011. Gaya Makmur Tractors has finally
made its predicted entry with XCMG and Keihatsu (Shantui) machines in 2012, and Sany has
started up with the John Deere agricultural tractor importer, clearly hoping to win customers in
the plantation companies. Perhaps the least predictable route of entry is the 2012 appearance of
Pusaka Andalan, a new company founded by the Blue Bird taxi company to sell Zoomlion
excavators.
Table 47. Indonesia: Population of Hydraulic Excavators by Type of User, 2012
Units %
Construction
– Civil Engineering 1,150 3
– General 14,000 33
Mining 10,400 25
Forestry 5,900 14
Agriculture (Plantations) 5,700 14
Industry 3,000 7
Quarries 950 2
Rental Companies 600 1
Government 300 1
Total 42,000 100
The working population of hydraulic excavators has risen very fast, given the sale of
20,000 units in the last 24 months. It had risen from 20,000 in 2006 to 27,200 in 2010 but then
soared to 42,000 by the beginning of 2012. The wheeled excavators number 50 units. The
largest user is general contracting, which employs a wide variety of machines, with the largest
group being the 12 and 20 tonne types. Mining may well overtake it soon, as it is a very
significant user. Although it is the majority buyer of large excavators over 35 tonnes, it also
employs large numbers of 12 and 20 tonne machines in the hands of sub-contractors and small
mine operators. Forestry has little time for bulky machines and most of the units employed with
71
grabs or on path/road making are the 12 tonne machines. Likewise the machines used for
clearing land to make plantations, which account for nearly as many machines as forestry, with a
taste for the same 12 and 20 tonne sizes.
Forecast
Table 48. Indonesia: Forecast Sales of Hydraulic Excavators by Type, 2012-2016

(Units)
2012 2013 2014 2015 2016

Wheeled 5 5 5 5 5
Crawler 13,000 14,500 15,000 16,000 17,000
Total 13,005 14,505 15,005 16,005 17,005
The recent development of sales has been quite unprecedented and pushed volumes up to such a
high point that 2012 was bound to be vulnerable. The negative factors that have calmed down
the market are the fall in the spot coal price and the argument with the government over the
smelters and ore exports. In fact sales were up by 14 per cent in the first half of 2012 but the
boom in commercial, residential and public works building was offset by declines in mining for
many suppliers.
Some suppliers were clearly catching up on lost opportunities of 2011 but others were already
slowing in the first half of the year and nobody expects larger orders in the second half of 2012
than in 2011. This resolves itself into a small rise in sales in the present year. After that growth
should resume. Recovery in demand and price of several main commodities such as crude palm
oil and coal, as well as better conditions of financial liquidity will lead the market to expand.
The very positive trend in GDP growth convinces investors that they can risk money now in a
way that they would not have done before.
Beyond 2012 there is the prospect of GDP growth around 6.5 per cent per annum to 2016 and
real growth in fixed investment and construction activity in the same time frame of at least nine
per cent. The aim to double palm oil production might not be exactly realised but that sector is in
any case growing fast and will need a lot of machinery to establish and maintain its plantations.
Mining, especially coal for export to China and the upcoming domestic power stations, will
continue to absorb large numbers of machines, in all sizes.
72
The structure of demand will remain the same with the 20 tonne excavator continuing to account
for over 75 per cent of sales. The mining sector, as a continued source of strong demand, will
move to even larger machines with capacities of over 100 tonnes. The forestry sector is also
predicted to be a reliable source of demand, with 12 and 20 tonne machines being the most
favoured.
Machines Available
The table below shows the products available in 2012 through distributors registered in
Indonesia. It thus excludes the Chinese products where no official importer has been appointed.
Table 49. Indonesia: Wheeled Excavators Available, 2012
Service
Manufacturer Model HP Manufacturer (Tonnes) Source
Caterpillar M313D 115 Caterpillar 14.4 France
M315D 129 Caterpillar 16.1 France
Hitachi ZX130W 119 Isuzu 13.6 Japan

ZX160W 123 Isuzu 15.8 Japan
Hyundai R140W-7 115 Cummins 14.0 Korea

R170W-9 155 Cummins 17.7 Korea
Volvo EW145B 122 Volvo 15.0 Germany
Table 50. Indonesia: Crawler Excavators Available, 2012
Service
Caterpillar 307D/SB 54 Caterpillar 7.2/8.4 Japan
308D SB 55 Caterpillar 8.0 Japan
311D LRR 80 Caterpillar 12.0 Japan
312D/L 90 Caterpillar 12.9/13.1 Japan
(continued)
73
Table 50. Indonesia: Crawler Excavators Available, 2012 (continued)
Service
Caterpillar 314C CR/LCR 90 Caterpillar 14.6/14.8 Japan
(continued) 315D/DL 115 Caterpillar 16.4/16.8 Japan
318D 125 Caterpillar 19.5 Japan
320D 138 Caterpillar 19.8 Indonesia
319D 115 Caterpillar 20.0 Japan
320D L 138 Caterpillar 21.0 Japan
321D LCR 148 Caterpillar 24.2 Japan
365C L 404 Caterpillar 66.0 Japan
385C L 513 Caterpillar 85.0 Japan
Doosan DX140LC 95 Doosan 14.0 Korea

DX225LC 148 Doosan 21.5 Korea
Solar 340 LC-V 250 Doosan 33.9 Korea
Solar 500 LC-V 316 Doosan 49.9 Korea
Hitachi ZX110M/MF-3 84 Isuzu 10.4 Indonesia

ZX200-3 147 Isuzu 19.8 Indonesia
ZX210MF-3 147 Isuzu 20.8 Indonesia
ZX240-3 177 Isuzu 23.4 Japan
ZX330LC-3 271 Isuzu 31.6 Indonesia
ZX400LCH-3 271 Isuzu 39.0 Japan
ZX470H-3 348 Isuzu 47.1 Japan
ZX520LC-3 348 Isuzu 52.0 Japan
EX1200-6 760 Hitachi 144.0 Japan
EX1900-6 1,086 Hitachi 192.0 Japan
EX2500-6 1,400 Cummins 248.0 Japan
EX5500-6 2,800 Cummins 522.0 Japan
Hyundai Robex 110-7 85 Mitsubishi 11.2 Korea

Robex 140LC-9 115 Mitsubishi 14.0 Korea
Robex 210LC-7 150 Cummins 24.4 Korea
(continued)
74
Service
JCB JS200 127 Cummins 20.0 India
JS210 172 Isuzu 21.7 India
Kobelco SK130L-8 99 Isuzu 14.7 Japan

SK200-8 153 Isuzu 20.2 Thailand
SK210LC-8 153 Isuzu 20.6 Japan
SK250 168 Isuzu 24.1-24.7 Japan
SK330-8 264 Isuzu 33.6 Japan/Thailand
SK350LC-8 264 Isuzu 34.3 Japan
SK460 326 Isuzu 51.2 Japan
SK850LC ME 496 Isuzu 78.7 Japan
Keihatsu 921 C 150 Cummins 20.5 China
Komatsu PC130F-7 86 Komatsu 13.0 Japan

PC200-7 143 Komatsu 20.8 Indonesia
PC200-8 143 Komatsu 20.8 Thailand
PC300LC-8 241 Komatsu 31.5 Indonesia
PC300SE-7 241 Komatsu 33.5 Indonesia
PC400-8 330 Komatsu 44.2 Indonesia
PC600-7 385 Komatsu 56.6 Japan
PC750SE-7 454 Komatsu 73.2 Japan
PC800SE-7 454 Komatsu 75.6 Japan
PC1250SP-7 651 Komatsu 109.5 Japan
PC1800-6 908 Komatsu 180.0 Japan
Liebherr R9110 757 Cummins 110 France

R984C 685 Cummins 125 France
R9250 1,287 Cummins 253.5 France
R9350 1,500 Cummins 310 France
R996B 3,000 Cummins 652.8 France
R9800 4,000 Cummins, MTU 804 France
LiuGong CLG205C 145 Cummins 19.8 China

CLG225C 145 Cummins 20.7 China
CLG922LC 145 Cummins 21.0 China
Sany SY215C-8 155 Mitsubishi 20.3 China
Sumitomo SH210LC-5 160 Isuzu 21.2 Indonesia

SH240-5 180 Isuzu 25.0 Japan
SH300-5 209 Isuzu 29.8 Japan
SH350HD 271 Isuzu 35.2 Japan
SH700HD-3 469 Isuzu 68.9 Japan
(continued)
75
Service
Volvo EC140B 93 Volvo 15.2 Korea
EC180B 109 Volvo 19.0 Korea
EC380D 283 Volvo 37.8 Korea
EC480D 348 Volvo 53.1 Korea
XCMG XE215C 143 Isuzu 21.5 China
Zoomlion ZE205E 150 Cummins 20.5 China
CRAWLER DOZERS
Table 51. Indonesia: Sales of Crawler Dozers by Horsepower Category, 2007-2011
2007 2008 2009 2010 2011

Horsepower Units % Units % Units % Units % Units %
61-100 69 5 88 5 50 5 123 7 125 4
101-150 96 7 88 5 15 1 5 - 15 1
151-250 1,033 75 1,336 76 738 70 1,484 78 2,221 78
251-300 138 10 175 10 150 14 150 8 250 9
Over 300 41 3 73 4 101 10 130 7 240 8
Total 1,377 100 1,759 100 1,054 100 1,891 100 2,851 100
The effects of the Asian financial crisis of 1997 lasted until 2001 but then dozer sales recovered
fast, reaching 800 units by 2004, albeit with only 80 of those units above the 250 horsepower
mark. The market steadied for two years but after 2006 the expansion of coal mining and the
opening up of oil palm plantations caused a surge of demand, to reach a peak of 1,759 units in
2008. The figure for 2009 shows the effect of the nervousness about investment caused by the
worldwide financial crisis and the 40 per cent decline was indeed somewhat worse than the fall
in hydraulic excavator sales. In 2010 all that decline was cancelled out and 2011 reached record
heights, especially in the favoured sizes of 150-250 horsepower.
76
The key to crawler dozer demand now is the ever increasing requirements of the coal mining
industry in Sumatra, and particularly in Kalimantan. The surge in the coal industry requires large
numbers of crawler dozers for driving roads too hard to reach locations, and for the removal of
forests; then, for the removal of overburden, before coal seams are revealed and mining work
begins. The Ministry of Energy and Mineral Resources also insists on much better
environmental management, so that mining sites are returned to something like a natural
environment after extraction has ceased, with contractors having to build levees and control
water courses to limit the pollution of rivers. All of these tasks require large numbers of crawler
dozers and the mining industry powers about 60 per cent of the business.
Just under 20 per cent of demand can be attributed to oil palm plantations, which are still in the
expansion phase. Crawler dozers are used for the clearance of forests, the building of basic roads
and the control of irrigation channels. Forestry itself is also relevant but that market is only half
the size of the plantation market.
Crawler dozers can be classified into three main categories. Small dozers up to 150 horsepower
are used mainly in agriculture, oil palm and sugar plantations and for fish and shrimp aquaculture
schemes. This has been a substantial part of the market from 2004 to 2008, accounting for 150 to
200 units each year but in 2009 sales were very low, as confidence collapsed temporarily. Sales
have come back but with less enthusiasm than before.
The medium size dozer category, between 150 and 250 horsepower, is by far the most popular
segment, accounting for 75 per cent of sales. The leading use is in mining of all kinds but
dominated by coal. Small sub-contractors working on the opening up of coal mines are good
customers for these machines. Construction and road building are the second reason why
volumes have risen in the last two years, followed by land clearing for oil palm plantations and
forestry. The main emphasis in construction is on site preparation, but not the building of major
roads, the funding of which is still lacking.
The interesting trend in recent years has been the rise in popularity of large machines. Sales of
machines in the 251-300 horsepower category have more than tripled in the last six years.
Demand for the more powerful machines comes almost exclusively from the mining sector and
reflect the coming of big investors like Adaro, Kaltim and Berau, which are also the buyers of
the super large excavators. Deliveries of even larger machines have moved from a regular 30
units per year six years ago to a level in 2011 that makes the country one of the most important
markets for these 600 horsepower giants on the globe.
77
There are many different attachments available for crawler dozers, to suit the particular
application. For land clearing, dozers are usually sold with straight blades and a ripper. In the
logging industry an angled blade and a strong hydraulic winch are often fitted. Also, available
from local Indonesian manufacturers, a log fork with its high curved profile, able to push many
logs at once. In the construction sector a straight blade is normally the standard fitting.
Production
The domestic production of crawler dozers was established in the mid-1980s and the two
manufacturers have almost matched production volumes since that time. Both companies
produced almost exclusively for the domestic market. In December 2011 Caterpillar phased out
its model D7G; in April 2012 it phased out the D6G, which ended crawler dozer production at
that plant. For the local market they are being replaced by the ‘R’ series of each model, made in
Japan and, eventually in Thailand.
Table 52. Indonesia: Production of Crawler Dozers by Manufacturer, 2007-2011

(Units)
2007 2008 2009 2010 2011

Komatsu 600 900 500 1,050 1,650
Caterpillar 396 630 90 370 500
Total 996 1,530 590 1,420 2,150
Komatsu produces two basic models, the D68ESS, a 170 horsepower machine which comes
with multiple attachments to suit both agriculture and infrastructure work. The more powerful
D85ESS is used mainly in the logging industry and in mining for forestry clearance and road
building. The prosperity of the local market allowed production to double from 2003 to 2007,
but after a peak in 2008 output declined in 2009. Deliverance came in the form of the expansion
of the coal industry, with sales both to the plant’s part owner and to third parties. Sales doubled
in 2010 and added a third in 2011.
The Komatsu factory is committed to substantial orders to provide crawler dozers for contractors
opening up and working in the coal mines in Kalimantan (the Komatsu dealer’s parent has
invested substantial marketing efforts in the contracting business). This dual relationship of
being both manufacturer and customer does not seem to have harmed its standing in the market,
but it means that it can achieve volumes that will simply not be available to its rival Caterpillar.
78
Caterpillar manufactured crawler dozers locally from 1983 to 2012. For the five years shown
above the factory assembled the G series versions of the D6 and D7, in the LGP and various
other versions until finally dropping production in 2012. Total production stayed between 400
and 500 units per year from 2005 to 2007 and peaked in the successful year of 2008, when it rose
to 630 units. 2009, on the other hand, was a very poor year, with the domestic market very weak
and machines being sourced from China, instead of locally. Production came back in 2011 to
historic levels but for reasons connected to altered sourcing patterns, the dozers have been
stopped.
Component Sourcing
Komatsu imports its engines, hydraulics and electronic components from Japan, but virtually all
fabricated parts are manufactured locally. Chassis, cabs and engine covers are made locally,
some of which are sourced from PT Katsushiro, a manufacturer of welded and pressed
components. While large steel components are fabricated in-house, a growing number of
elements are sub-contracted, mainly in the Jakarta region. For example, PT Hanken Indonesia, a
joint venture between Komatsu and Hanken Works Ltd, produces fabricated sections for the
dozers but also for Hitachi, Caterpillar and Sakai local operations. PT Hokuriku United Forging
Industry is a joint venture between Komatsu, Hokuriku Kogyo of Japan and Nagatsu Industries,
producing most of the links for crawler dozers made by Komatsu.
Table 53. Komatsu Indonesia: Component Sourcing for Crawler Dozers, 2012
Diesel Engines Japan

Transmissions Japan
Hydraulics Japan
Chassis In-house
Frames In-house
Undercarriages Komatsu Undercarriage Indonesia
Running gear Komatsu Undercarriage Indonesia
Cabins Local sub-contractors
Blades Komatsu Patria Attachment
Foreign Trade
There are no exports of domestically produced crawler dozers at the present time.
79
Market Shares
The two market leaders are Komatsu and Caterpillar, which jointly accounted for 97 per cent of
the market in 2011. That concentration has applied for the last ten years. After the collapse of
the construction equipment market in the late 1990s most of the long-established names have all
but disappeared. The appearance of Chinese crawler dozers in 2005 was thought to be a portent
for the future but the reality has been somewhat different.
Komatsu has taken the lead in the crawler dozer market since 2002, while in the previous decade
Caterpillar was the traditional market leader. The company offers a very wide range of dozers
from 100 to 750 horsepower, but the two most popular models sold in Indonesia are the locally
made D68 and D85, which jointly account for 80 per cent of sales. Komatsu has lately been
successful in selling much larger crawler dozers, no fewer than 300 units over 300 horsepower
being delivered in 2011 for land and overburden clearance in the coal mines.
Table 54. Indonesia: Suppliers of Crawler Dozers and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Komatsu 700 51 1,060 60 631 60 1,300 69 2,000 70
Caterpillar 630 46 561 32 365 35 530 28 760 27
Shantui 40 3 60 3 30 3 30 2 35 1
Xiagong - - 30 2 5 - 15 1 30 1
John Deere - - 22 1 2 - 11 11 19 1
LiuGong 2 - 21 1 16 2 4 - 7 -
Case 5 - 5 - 5 - 1 - - -
Total 1,377 100 1,759 100 1,054 100 1,891 100 2,851 100
Caterpillar has lost market share to Komatsu in a serious fashion since 2007, partly because of
the latter’s more aggressive sales stance, but also because of UT’s involvement in its own
contracting business and success with other mining contractors. However, Caterpillar’s D6 and
D7 machines are firmly established nationwide and its future in the crawler dozer market looks
assured.
The rest of the market is minuscule and is divided between one American supplier and various
Chinese manufacturers.
80
Shantui is the first Chinese crawler dozer manufacturer to make an impact on the market. Also
known as Shandong Bulldozer, it is the largest crawler dozer manufacturer in China and indeed
the world. Shantui’s products are very similar to older models of Komatsu, as Komatsu licensed
Shantui to produce its designs as early as the 1970s. It makes about 60 per cent of all Chinese
crawler dozers and exported more than 2,000 units in 2011.
The importer, Gaya Makmur Tractors began life only seven years ago and is determined to build
its success on Chinese construction equipment. The most satisfactory performers have been the
various XCMG products but by mid-2012 it had sold 250 Shantui dozers.
The other two Chinese visible in the market have made less of the crawler dozer business. Oscar
Mas sells a Xiagong model in small numbers. LiuGong has been moderately successful with its
importer Indotruck but in 2012 the franchise has been obligatorily moved to a new dealer,
Panca Traktor.
In 2008 the Hitachi dealer switched to selling the John Deere products, starting only with the
155 horsepower model 750. After an energetic launch in 2008 the product hit hard times in
2009. Out of 80 orders won, nearly 60 were cancelled after the Lehman Bros. collapse. The
company would like to launch a larger model of 200 horsepower, but it is not sure that it can
overcome a 20 per cent price disadvantage compared to the Komatsu D85.
Table 55. Indonesia: Distribution Networks of Suppliers of Crawler Dozers, 2012
BEML BEML Indonesia
Deere Hexindo Adiperkasa
LiuGong Panca Traktor Indonesia
Shantui Gaya Makmur Tractors
Xiagong Oscar Mas
Xuanhua Kasana Teknindo
Zoomlion Berca Mandiri Perkasa
The Case dealer Probesco Disatama has ceased actively selling dozers, although it has a record
of small but regular sales to the coal terminals and to waste disposal sites. The reputation of the
market as a healthy source of business in 2012 has also drawn in Xuanhua and Zoomlion.
81
Table 56. Indonesia: Population of Crawler Dozers by Type of User, 2012
Units %
Mining 9,900 58
Agriculture (Plantations) 2,550 15
Forestry 1,350 8
Construction
– Civil Engineering 350 2
– General 2,550 15
Industry 150 1
Quarries 150 1
Total 17,000 100
The active population of crawler dozers is estimated to be at least 17,000 units. They are used in
every activity of national development, as otherwise impenetrable jungle covers many areas.
Dozers are needed to drive basic roads (mostly without tarmac), to clear forest for plantation
agriculture and in mining. The boom in oil palm plantations has been a particular boost to sales
in the last five years as has the doubling of capacity in the coal mines. The paper industry is a
small, but growing end-user of dozers as the programme of re-forestation has yielded some
success. Other aspects of agriculture are important end-users for crawler dozers, particularly
small to medium sized machines used in shrimp farming, rice paddies and the making and
maintaining of water courses.
Forecast
Table 57. Indonesia: Forecast Sales of Crawler Dozers, 2012-2016

(Units)
2012 2013 2014 2015 2016

2,700 2,500 2,300 2,500 2,500
Mining, forestry, plantations and construction have all been pushing the market to unheard of
levels in 2011. The recovery stage is over and so one has to look at the factors behind the high
demand of last year. The prices of raw materials from mining have weakened and there is the
problem of the export ban and the associated smelters dispute. On the other hand the crude palm
82
oil is steady and investment in that area is continuing, given that it takes five years to get to a
plantation paying back.
per cent. Public works and private building can make up for some of the lost volume from a
moderating demand from mining. Up to now construction has furnished only 15 per cent or less
of dozer orders abut it does at least look as if the major infrastructure projects that the country so
much needs will get off the ground.
The aim to double palm oil production might not be exactly realised but that sector is in any case
growing fast and will need a lot of machinery to establish and maintain its plantations. Mining,
especially coal for export to China and the upcoming domestic power stations, will continue to
absorb large numbers of machines, in all sizes.
Machines Available
Table 58. Indonesia: Crawler Dozers Available, 2012
Service
BEML BD50 90 Cummins 11.0 India
BD65/65X 165/180 BEML 16.8/17.1 India
BD80 180 Cummins 21.6 India
BD230 230 BEML 23.1 India
BD475 770 Cummins 95.3 India
Caterpillar D3K 74 Caterpillar 7.8 Japan

D4K 84 Caterpillar 8.1 Japan
D5K 96 Caterpillar 8.9 Japan
D5G 96 Caterpillar 9.3 Japan
D5N 115 Caterpillar 9.3 Japan
D6K XL/LGP 125 Caterpillar 12.9 Japan
D6R Series III 185 Caterpillar 18.3 Japan
D6R Series III XL, XW, LGP 185 Caterpillar 21.7 Japan
D7R Series II 240 Caterpillar 27.4 Japan
D8R 305 Caterpillar 37.6 USA
D8T 310 Caterpillar 38.5 USA
D9R 405 Caterpillar 47.8 USA
D10T 580 Caterpillar 66.0 USA
D11T/CD 850 Caterpillar 104.6 USA
(continued)
83
Table 58. Indonesia: Crawler Dozers Available, 2012 (continued)
Service
John Deere 750J 145 John Deere 14.8 USA
850J 184 John Deere 18.2 USA
Komatsu D31E-20 78 Komatsu 9.0 Japan

D39EX-22 105 Komatsu 9.0 Japan
D633-12 168 Komatsu 14.6 Japan
D65P-12 190 Komatsu 20.0 Japan
D68ESS-12 155 Komatsu 17.6 Indonesia
D85ESS-2 155 Komatsu 28.0 Indonesia
D85ESS-2A 200 Komatsu 28.0 Indonesia
D155A-6R 354 Komatsu 41.7 Japan
D275A-5 410 Komatsu 49.9 Japan
D375A-5 525 Komatsu 70.3 Japan
D375A-6/6R 610 Komatsu 70.3 Japan
D475A-5 SD 860 Komatsu 107.5 Japan
D575A-3 SD 1,150 Komatsu 153.7 Japan
LiuGong CLGB160 160 Shanghai Diesel 16.6 China

CLGB180 180 Shanghai Diesel 18.4 China
Shantui SD13 130 Dongfeng 14.0 China

SD16 160 Shanghai Diesel 17.5 China
SD22 220 Chongqing Cummins 23.5 China
Xuanhua TY165-2 165 Shanghai Diesel 17.8 China

TY230 230 Chongquing Cummins 25.7 China
Xiagong XG4221L 220 Chongquing Cummins 24.0 China
Zoomlion ZD160-3 163 Cummins 16.4 China

ZD220-3 220 Cummins 24.3 China
ZD320-3 320 Cummins 37.4 China
84
CRAWLER LOADERS
The small number of crawler loader sales is attributable to two main factors. Firstly, wheeled
loaders have gained in popularity, due to their lower cost, lower running costs and ease and speed
of movement. Crawler loaders are used in small numbers, and mainly in the logging areas where
conditions are too difficult for wheeled loaders. There are areas in Kalimantan and Sulawesi
where deep gorges and treacherous slopes make a tracked vehicle essential. Sales peaked
recently at 15 units in 2005, but fell back to two units in 2009. None has been sold in the last
two years.
Table 59. Indonesia: Sales of Crawler Loaders, 2007-2011

(Units)
2007 2008 2009 2010 2011

10 10 2 - -
Production
There is no domestic production of crawler loaders.
Market Shares
Table 60. Indonesia: Suppliers of Crawler Loaders and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Komatsu 5 50 7 70 2 100 - - - -
Caterpillar 5 50 3 30 - - - - - -
Total 10 100 10 100 2 100 - 100 - 100
Sales of crawler loaders used to be divided equally between Komatsu and Caterpillar. The
latter no longer actively promotes crawler loaders and Komatsu is now the only supplier. The
formerly popular models of the D57 with a 135 horsepower engine, and the D57-S5 with a
200 horsepower engine, have disappeared and the only survivor is the D31S at 70 horsepower.
85
The population of crawler loaders is estimated at 400 machines, with Komatsu accounting for
60 per cent and Caterpillar almost 40 per cent. Crawler loaders are used in logging, quarrying
and heavy construction work. They are also used in water irrigation projects.
Forecast
There seems to be no demand at all for the foreseeable future.
Table 61. Indonesia: Forecast Sales of Crawler Loaders, 2012-2016

(Units)
2012 2013 2014 2015 2016

- - - - -
Machines Available
Table 62. Indonesia: Crawler Loaders Available, 2012
Service Bucket
Engine Weight Capacity Product
Manufacturer Model HP Manufacturer (Tonnes) (m3) Source
Komatsu D31S-20 70 Komatsu 6.8 0.8 Japan
WHEELED LOADERS
The most important aspect of the demand for wheeled loaders is its small size, for although there
are some applications necessitating wheeled loaders their sales are relatively low. In
comparison, sales of 20 tonne crawler excavators have been 7.5 times as large as the whole of the
wheeled loader market in the most recent three year period.
86
Table 63. Indonesia: Sales of Wheeled Loaders, 2002-2011

(Units)
2002 83 2007 373

2003 108 2008 550
2004 136 2009 416
2005 190 2010 658
2006 180 2011 1,155
The answer lies with the climate. The whole archipelago is alternately dominated by the north
monsoon, blowing from China and the north Pacific between November and March, and the
south monsoon, blowing from the Indian Ocean and the Australian continent between May and
September. Apart from the reduced temperatures on the higher mountains, the climate is typical
of equatorial regions. Rainfall is heavy and well distributed around the year almost everywhere.
Most places receive 1,500-4,000 mm/60-160 in of rain a year. In Balikpapan, the unofficial
capital of the coal mining industry, for example, monthly rainfall is never less than 130 mm and
as much as 230 mm. Its yearly total averages 2,230 mm but the rain falls on only 147 days in the
year.
It follows that nobody can buy a wheeled loader and expect to operate it all the year round. It
simply will not have the grip to operate at all for many days of the year. In the 1990s the state
favoured wheeled loaders for earthmoving on its infrastructure projects and sales could reach
500 units in a year. Then the collapse of the Rupiah in 1997 saw sales plunge from over
500 units to none at all during 1998 and 1999. The upturn has been very slow in coming, part of
the reason for this being that crawler excavators have taken over many of the tasks that wheeled
loaders used to carry out.
In 2006, sales reached 180 units, which is less than half the level seen in 1996. In that year,
however, two Chinese manufacturers became active in the market through successful importers.
China has a massive manufacturing volume in wheeled loaders (250,000 units in 2011) and when
the government there wanted to cool its economy, the manufacturers were keen to sell wheeled
loaders overseas. As they undertook their promotions the market background was favourable,
with construction, coal mining, forestry and the oil palm industries all growing strongly. In 2007
to 2009 the established suppliers also increased their sales, but the price advantage of Chinese
products means that the wheeled loader became a product of wider appeal. Essentially, Chinese
suppliers do best by offering the basic specification without extras that add cost, so the machine
appeals to smaller sub-contractors working on slim profit margins.
87
Sales of wheeled loaders as a whole have gone quickly from 180 in 2006 to 550 in 2008,
followed by a predictable cooling-off in 2009. By 2008 the expansion could be ascribed half to
the Chinese type of machine and half to the more expensive Westerners.
Table 64. Indonesia: Sales of Wheeled Loaders by Horsepower Category, 2007-2011
2007 2008 2009 2010 2011

61-100 19 5 22 4 8 2 1 - 15 1
101-150 172 46 224 41 188 45 227 34 340 29
151-200 75 20 99 18 75 18 120 18 190 16
201-250 70 19 127 23 104 25 200 30 400 35
251-350 30 8 50 9 33 8 60 9 100 9
351-400 7 2 28 5 8 2 40 6 90 8
Over 400 - - - - - - 10 2 20 2
Total 373 100 550 100 416 100 658 100 1,155 100
Chinese exports moderated in 2009 but came back in 2010 and were higher than ever in 2011. If
one looks at the total of 1,155 loaders sold in 2011, it is essential to remember that 450 of them
were sold at prices around 50 per cent lower than the products of the traditional suppliers. That
compares with around 100 Chinese loaders sold in 2007; it follows that the market for ‘full price’
products has gone from 270 to 750 units in the same time period. One overwhelming reason is
the movement of massive amounts of coal to the ports and in them; and the other is the increased
confidence of the quarries and cement works to invest for what they now see as a bright future.
Wheeled loaders under 100 horsepower are hardly sold at all due to the abundance of cheap
labour. The smallest of the popular categories of machines is between 100 and 150 horsepower.
The arrival of the Chinese products has boosted this sector, since the 120 horsepower design,
known there as the ZL30, is produced in massive quantities. From whatever origin, this size is
popular in coal yards and for processing in oil palm plantations, although more for handling the
empty fruit bud than the delicate fruit before crushing.
Above 150 horsepower there is a relatively important class of 170 to 180 horsepower machines.
When the market was much lower seven years ago, this used to account for a quarter of all the
units sold. The advent of low priced Chinese units at 220 horsepower in 2007 has diminished its
weight. Thus the 220 horsepower class is now almost twice as large as the class below it and
mostly because it has taken over those customers. Wheeled loaders as used in quarries, for the
loading of aggregates and sand, in concrete batching plants and in ports and transport depots for
88
the loading and unloading of bulk materials; all of these are divided between the two classes of
170 and 220 horsepower. In the higher class two thirds of 2011 sales were of Chinese products
at much lower than traditional prices.
Many more machines of over 250 horsepower capacity have been sold each year since the
difficult year of 2009, as the owners of quarries and open cast mines have regained their
confidence but the large excavator is still far more popular. Excavators over 50 tonnes sell more
than twice as well as large wheeled loaders, and there is really no choice for a coal mine operator
who wants to work when it rains.
Production
There has been no domestic manufacturing of wheeled loaders since the late 1990s, when
Komatsu and Caterpillar ceased production.
Market Shares
Table 65. Indonesia: Suppliers of Wheeled Loaders and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Komatsu 100 27 123 23 78 20 145 22 280 24
Caterpillar 70 19 83 15 50 12 98 15 198 17
LiuGong 43 12 63 11 59 14 94 14 152 13
Xiagong - - 75 14 70 17 100 15 130 11
XCMG 50 13 60 11 40 10 60 9 110 9
Kawasaki 30 8 35 6 42 10 50 8 60 5
Volvo 10 3 12 2 5 1 10 2 45 4
Hitachi 10 3 18 3 22 5 24 4 35 3
SDLG - - - - 10 2 20 3 25 2
SEM - - - - - - - - 25 2
Case 20 5 20 4 10 2 7 1 15 1
Hyundai 20 5 20 4 10 2 10 2 10 1
Others* 20 5 42 7 20 5 40 6 70 6
Total 373 100 550 100 416 100 658 100 1,155 100
* Doosan and Chinese suppliers

The arrival of the Chinese manufacturers has completely changed the pattern of market shares.
In the past three dominant suppliers Komatsu, Caterpillar and Hitachi accounted for around
90 per cent of the market and others scarcely troubled to challenge them. Now there are new
89
contenders and the Chinese manufacturers won at least 40 per cent of the market in only three
selling seasons and are still at that level.
Komatsu is still in first place, even though its share is less than half the level of eight years ago.
The company has a strong position with mining contractors and this has led to higher sales of all
related equipment; essentially excavators, wheeled loaders and dump trucks. Komatsu’s best-
selling models are the WA380 with a 187 horsepower engine and WA180 with a bucket size
from 1.6 m³ to 2.0 m³ and a 190 horsepower engine.
Caterpillar came back in the last two years from fourth to second place. It has one of the most
extensive ranges of wheeled loaders. Having been reliant on the small UK-built 924 and 930
models, it has scored highly with the much larger 966H at 286 horsepower. It will continue to
hold a major share of the wheeled loader market, because customers in the mining industry are
also buying excavators and dump trucks as a package.
LiuGong was the best-selling Chinese supplier in 2011. It found a committed importer in the
form of Indotruck in 2006. This Volvo Trucks dealer went into mechanical handling machinery
in the early 1990s and then took on LiuGong in 2006. The launch bore fruit rapidly and the
loaders won 14 per cent of the market in 2009, with the 215 horsepower model CLG856 being its
best seller. All its loaders use Cummins engines. In September 2011 the dealer accepted an
offer to take up the representation of Volvo construction equipment, and was obliged to take up
the SDLG Chinese products. Consequently, LiuGong did not sell much at the end of 2011.
Xiagong, sometimes known as XGMA, came into second place in 2009. The dealership,
PT Oscar Mas, was established in 2007 and started business only in 2008. It is designed to sell
Xiamen XGMA Machinery’s wheeled loaders, with an energetic young sales force. Xiagong is
China’s third largest manufacturer, with an output of around 20,000 units each year, so its
economies of scale are impressive. Oscar Mas has a full range of sizes on offer, all with
Shanghai Cummins engines, and has a number of other XGMA products on its books (led by
motor graders and compaction equipment). Its sales volumes have increased every year since
2009 but it has been overtaken by more aggressive and powerful competitors, so its market share
is somewhat reduced in 2011.
XCMG is in the hands of Gaya Makmur Tractors, which has set itself up as a specialist in
Chinese construction equipment of many types. In the wheeled loaders it concentrates on the
two classic products of 125 and 220 horsepower.
90
Kawasaki has lost ground since the last report. The importer, Altrak 1978, has good contacts in
relevant industries as a result sells the models 60, 70 and 80 to coal contractors and industry but
often loses out on sales of the largest machines. Hitachi, in contrast, has had some uncertain
times in respect of its wheeled loaders recently, as the newer ZW designs came on stream and
Hexindo has seen much of its former 10 per cent market share slip away. It now tops out its
range with John Deere models sourced from the USA.
The arrival of the second wave of Chinese manufacturers in 2011 means that the number of
brands represented has gone from 13 to 20.
Table 66. Indonesia: Distribution Networks of Suppliers of Wheeled Loaders, 2012
Manufacturer Distributor Manufacturer Distributor

Case Probesco Disatama LiuGong Panca Traktor
Caterpillar Trakindo Utama New Holland Daya Kobelco
Changlin Tata Suskes Mandiri SDLG Indotruck, Intraco Penta
Doosan Kobexindo SEM Tri Swardana Utama
Hitachi Hexindo Adiperkasa Shantui Panca Mitrajaya
Hyundai Swadaya Traktor Terex Airindo Sakti
John Deere Hexindo Adiperkasa Tiangong BMP
Kawasaki Altrak 1978 Volvo Indotruck, Intraco Penta
Komatsu United Tractors XCMG Gaya Makmur Tractors
Lonking Kasana Teknindo Xiagong Oscar Mas
Others show only small unit sales of loaders. Volvo was making some progress in the wheeled
loader market up to 2006, but in the quarry and mines business it is hard to win over users with
large fleets of competitive machinery. The importer has recently taken on the Volvo Group’s
SDLG wheeled loaders made in China. The Korean manufacturers Doosan and Hyundai now
play only a marginal role in the sector since they did not have sufficient time to consolidate their
position in the market before the crash of 1997, and have not recovered sufficiently since that
time.
The new Chinese suppliers launching themselves in 2012 include Lonking via a fork lift trucks
dealer; SEM via a member of the Caterpillar dealership’s group holding; and Shantui, which is
partnering with an enterprise involved in the pre-cast concrete industry.
91
The estimate of 7,000 units in existence in 2012 takes into account the import of used equipment,
mainly from Japan. Between 50 and 100 second-hand machines are imported annually from
Japan, most of which are sold through auction and specialist dealers.
The largest use is in quarries, for the loading of aggregates and sand, in concrete batching plants
and in ports and transport depots for the loading and unloading of bulk materials. The palm oil
industry uses them at several stages. Fresh fruit bunches are hand harvested and taken on small
trailers or trucks to a crude palm oil mill. Wheeled loaders put the material into the crusher and
dispose of the empty fruit bunches. The latter are now used as fuel for the mill, sold to
neighbours as fuel or processed into fertiliser. The crude oil and the kernel are then taken to
factories that turn them into refined products but without the use of wheeled loaders.
Table 67. Indonesia: Population of Wheeled Loaders by Type of User, 2012
Units
Quarries and Mines 3,035
Plantation Agriculture 1,850
Industry 750
Construction
– Civil Engineering 550
– General 375
– Water Resources/Irrigation (State) 275
– Road Authorities 165
Total 7,000
Manual labour still moves material wherever possible, but not where a high volume needs to be
moved in a short time. Wheeled loaders are therefore also employed in agriculture, for the bulk
handling of rice and cassava and in the sugar industry for the loading and shipment of sugar cane,
although excavators are also widely used in this capacity.
Forecast
The forecast shows steady progress in sales. The habit of using wheeled loaders must increase as
Chinese products come in at lower prices. The health of the wheeled loader market depends on
mining, construction and the plantations and prospects are good in the medium term in all of
those areas.
92
Table 68. Indonesia: Forecast Sales of Wheeled Loaders, 2012-2016

(Units)
2012 2013 2014 2015 2016

1,200 1,400 1,600 1,800 1,800
per cent. The aim to double palm oil production might not be exactly realised but that sector is in
any case growing fast and will need a lot of machinery to establish and maintain its plantations.
Mining, especially coal for export to China and the upcoming domestic power stations, will
continue to absorb large numbers of machines, in all sizes.
Machines Available
Table 69. Indonesia: Wheeled Loaders Available, 2012
Engine Product
Manufacturer Model HP Manufacturer Source
Case 521E/XT 118 Case USA
621E/XR 146 Case USA
721E/XR 172 Case USA
821E 192 Case USA
921E 274 Cummins USA
1221E 320 Cummins Korea
Caterpillar 906H 69 Caterpillar UK

907H 70 Caterpillar UK
914G 95 Caterpillar UK
928Hz 149 Caterpillar UK
950H 217 Caterpillar Japan
988H 475 Caterpillar USA
992K 800 Caterpillar USA
994F 1,463 Caterpillar USA
Changlin ZL50G-7 215 Shanghai, Cummins China

ZL60H 244 Shanghai, Cummins China
ZL75H 294 Shanghai, Cummins China
(continued)
93
Table 69. Indonesia: Wheeled Loaders Available, 2012 (continued)
Engine Product
Doosan Mega 160-V 105 Doosan Korea
Mega 200-V 140 Doosan Korea
Mega 500-V 340 Cummins Korea
DL 200 139 Doosan Korea
DL420 264 Cummins Korea
Hitachi ZW20 21 Kubota Japan

ZW30 30 Kubota Japan
ZW80 61 Isuzu Japan
ZW90 71 Isuzu Japan
LX70-7 87 Isuzu Japan
ZW140 129 Isuzu Japan
Hyundai HL740-7A 133 Cummins Korea

HL757-7A 164 Cummins Korea
John Deere 444 127 John Deere USA

524 148 John Deere USA
Kawasaki KS50ZV-2 95 Cummins Japan

KS60ZV-2 124 Isuzu Japan
KS70ZV-2 160 Isuzu Japan
KS85ZV-2 216 Nissan Japan
KS90ZV-2 256 Nissan Japan
KS95ZV 340 Cummins Japan
(continued)
94
Engine Product
Kawasaki KS115ZV 445 Cummins Japan
(continued) KS135ZV 720 Cummins Japan
Komatsu WA80-5 60 Komatsu Japan

WA120-3 85 Komatsu Japan
WA1200-3 1,560 Komatsu Japan
LiuGong CLG816 63 Yanmar China

CLG835 123 Cummins China
Lonking CDM 816B 60 Yituo China

CDM 833 125 Weichai Deutz China
CDM 843 175 Weichai Deutz China
CDM 855E 210 Weichai China
New Holland W110B 148 FPT Italy

W130B 174 FPT Italy
W170B 197 FPT Italy
W190B 227 FPT Italy
SDLG LG938 118 Cummins China

LG958 220 Weichai China
SEM 638 123 Cummins China

650B 217 Shanghai Diesel China
Shantui SL20W 100 Yituo China

SL30W 123 Weichai Deutz China
SL50W 215 Dongfeng Cummins China
Tiangong ZL15G 100 Perkins China

ZL30H 120 Cummins China
ZL50H 220 Cummins China
Volvo L20F 54 Volvo Germany

L25F 60 Volvo Germany
(continued)
95
Engine Product
Volvo L30B pro 66 Volvo Germany
(continued) L35B pro 70 Volvo Germany
L40B 84 Volvo Germany
L45B 99 Volvo Germany
L50E 101 Volvo Brazil
L60F 140 Volvo Sweden
L150G 300 Volvo Sweden
XCMG LW300F 125 Yuchai China

ZL50G 220 Weichai China
Xiagong XG9161 59 Weichai China

XG918 79 Cummins China
XG932 II 123 Weichai China
XG951 III 217 Shanghai China
XG956 II 217 Shanghai China
XG 958 217 Shanghai China
XG 958 II 220 Cummins China
XG 962 235 Shanghai China
BACKHOE LOADERS
Table 70. Indonesia: Sales of Backhoe Loaders, 2007-2011

(Units)
2007 2008 2009 2010 2011

205 279 190 284 388
The concept of the backhoe loader is still struggling, although there are signs of a small but loyal
following. By the mid-1990s sales at last passed the 100 unit per year mark, only to collapse to
96
zero after the financial crisis of 1997. The small milestone of more than 100 sales in a single
year was passed only in 2005 but the market immediately ran out of steam in 2006. Construction
activity then grew strongly and favoured the conquering of some new devotees in 2007 and 2008.
There was a dip in 2009 but it was no worse than in other products. Since then progress has been
good, thanks to efforts to sell the machine to companies opening up oil palm plantations. By
2011 general construction was also making a contribution, so that sales were twice as high as in
2009.
Although sales have been progressing, the machine is still not universally understood by
end-users who see the crawler excavator as a worthy and cost-effective substitute. Part of the
problem may be the large number of individual excavator operators willing and able to supply
excavating/loading services with their 20 tonne excavator for not much more than the price of
fuel. The main problem, however, is that the Indonesian-made 20 tonne crawler excavator retails
at around $85,000 to $90,000, while a backhoe loader, shipped all the way from Europe, comes
onto the market at $60,000 to $65,000. The 7.5 to 8.0 tonne backhoe loaders cannot claim to be
as strong or productive, even if they are more compact than the big excavators.
The backhoe loader is the ideal tool for road repair and maintenance, but there is currently little
money allocated for road repair. The road building schemes of the mid to late 1990s resulted in
hundreds of kilometres of new tarmac road, but no provision for their repair and upkeep. Some
funds are allocated by central and local government, but some of these funds disappear into the
pockets of corrupt individuals.
Most backhoe loaders are two wheel drive, but four wheel drive has become increasingly
popular, especially from the plantation and water management/irrigation sectors.
Production
There is no domestic production of backhoe loaders.
Market Shares
Since 2008 the biggest seller has been JCB. The British manufacturer considered that it had
solved its distribution problems in 2006, when it appointed Traktor Nusantara as its dealer.
Although Traknus would not sell the hydraulic excavators because of its ownership links to Astra
and hence to United Tractors, it did take up the backhoe loaders with enthusiasm. In 2007, the
first full year of selling, Traknus managed to win nearly a third of the market. 2008 was also a
97
good result but in that year JCB resolved that it needed a better seller of hydraulic excavators
than United Equipment, so in the last quarter of the year it appointed PT Altrak 1978. This
dealer had links to New Holland but has given up selling the construction equipment in 2005, so
it was ready to work with an alternative. It proved its abilities by winning nearly 40 per cent of
the market for JCB in 2009 and staying at just below that level through to 2011.
Table 71. Indonesia: Suppliers of Backhoe Loaders and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

JCB 65 31 125 45 75 39 97 34 143 37
Case 80 39 100 36 70 37 135 44 110 28
Terex - - 3 1 2 1 25 9 60 15
Caterpillar 35 17 16 6 23 12 20 7 55 14
John Deere - - - - - - 2 1 10 3
LiuGong - - - - - - - - 5 1
New Holland 10 5 20 7 10 5 5 2 5 1
Komatsu 15 7 15 5 10 5 - - - -
Total 205 100 279 100 190 100 284 100 388 100
Case was the first after the recession to promote its products and has had modest success, leading
the market from 2004 to 2007 inclusive. The influence of Case in the wider construction
equipment market and the high quality of its dealer network, have undoubtedly added
considerable weight to its position. It was temporarily market leader again in 2009, selling the
580 Super N from the USA.
Terex has reorganised its presence in the country since the last report and linked up with United
Equipment, when it ceased its campaigning for JCB. Uniquip emphasised the dump trucks and
backhoe loaders in its first full year of 2011 and rose straight to a 15 per cent market share with
the British-made model 820.
Caterpillar is thus pushed down to fourth place in the backhoe loader market, mainly selling the
model 422E. The CNH associate Kobelco has taken up the New Holland construction
equipment lines but has sold the backhoe loaders here only since 2006. It sells mostly the model
LB90. John Deere had been one of the leading players but uncompetitive prices have led the
dealer Hexindo to cease stocking it before 2011. United Tractors has now given up selling the
Komatsu product.
98
Table 72. Indonesia: Distribution Networks of Suppliers of Backhoe Loaders, 2012
Case Probesco Disatama
JCB Altrak 1978
John Deere Hexindo Adiperkasa
LiuGong Panca Traktor
New Holland Daya Kobelco
Terex Uniquip Indonesia, Airindo Sakti
Xiagong Oscar Mas
There are three suppliers of Chinese backhoe loaders in theory but none have yet sold a unit.
Table 73. Indonesia: Population of Backhoe Loaders by Type of User, 2012
Units
Quarries and Mines 50
Plantation Agriculture 500
Construction
– Civil Engineering 40
– General 810
– Water Resources/Irrigation (State) 300
Total 1,700
The population of backhoe loaders is estimated at 1,700 units. Half of machines are working in
construction. Drainage and water management schemes are in second place. A significant
proportion of the population of machines were sold to local authorities for tasks such as clearing
ditches, especially before and after the rainy season. Urban drainage systems are in need of
considerable investment, due to worsening annual problems of flooding of the archaic and
overtaxed canals. Some backhoe loaders are hired out by owner operators, in a similar way to
excavators, but the number of owner operators is still very limited.
Many of the newest machines are working in the agricultural sector, specifically the oil palm
plantations.
99
Forecast
Table 74. Indonesia: Forecast Sales of Backhoe Loaders, 2012-2016

(Units)
2012 2013 2014 2015 2016

400 500 600 800 900
The forecast for backhoe loaders is relatively optimistic. The dealers of JCB, Case and Terex are
determined to spend the time and effort to convince end-users of the advantages of the backhoe
loader, and the situation can evolve in an even more positive way. They will not, however, be
joined by bigger distributors wedded to the 20 tonne crawler excavator (UT, Trakindo or
Hexindo) and, given the low cost of labour and pre-eminent position of excavators in the minds
of owners and operators, the market is unlikely to explode. The major players in the construction
equipment market are in effect diverting their resources to sales and marketing in the mining
market. So, smaller powers will achieve good results but only relative to the past, when almost
no backhoe loaders were sold.
The good news for those wedded to promoting the machine is that no great enthusiasm is
predicted for the machine that in other markets has been its nemesis, namely the mini excavator.
It is therefore possible that in the coming years when the volume of small private construction
grows alongside public works, this machine type will do quite well.
Machines Available
This short list details the machines that are stocked by the distributors. All the manufacturers
have longer ranges but not every model can be sold, given the need for a Tier 2 engine to meet
customers’ needs.
100
Table 75. Indonesia: Backhoe Loaders Available, 2012
Max.
Engine Service Weight Product
Case 580 Super N 90 Case 7.9 USA
Caterpillar 416 89 Perkins 6.8 UK

422E 90 Perkins 7.2 UK
JCB 3DX 76 JCB 7.5 India

3CX 85 JCB 7.6 UK
John Deere 310SJ 93 John Deere 7.7 USA
Komatsu WB93R-2 98 Perkins 7.5 Italy
LiuGong CLG 766 94 Perkins 8.3 China
New Holland B90B 97 New Holland 8.4 Italy
Terex 820 92 Perkins 7.2 UK

TX760B 94 Perkins 6.9 UK
Xiagong XG 765 100 Cummins 7.4 China
SKID-STEER LOADERS
Table 76. Indonesia: Sales of Skid-Steer Loaders, 2007-2011

(Units)
2007 2008 2009 2010 2011

80 66 20 50 70
The skid-steer loader market has never reached the 100 unit per year barrier, and is unlikely to do
so. Deliveries began only in the early 1990s, but even then only in single figures or tens of units.
Just before the financial crisis of 1997, sales had reached 90 units, but demand completely died
away in 1998 and 1999, only to recommence in single figures in 2001.
101
Sales have increased in the period since 2002, but numbers remain disappointingly low. The
main applications are in the agricultural sector, for loading materials such as rice husks (a source
of cooking fuel), palm oil kernels and other agricultural by-products. Skid-steer loaders have
never really penetrated the industrial markets, because of the abundance of low-cost manual
labour. One exception recently has been a few sales for units to feed small coal boilers. Indeed,
the type of work carried out by small skid-steer loaders in restricted spaces is more suited to one
or more individuals with shovels.
There are some niche areas where the product is ideal, such as glass factories and the loading and
unloading of potentially hazardous materials (e.g. abrasive materials, agricultural fertilisers and
chemicals). But the will to invest in promoting the product for only marginal returns is the main
reason why a market for this useful construction equipment tool has failed to develop.
Production
There is no domestic production of skid-steer loaders.
Market Shares
Table 77. Indonesia: Suppliers of Skid-Steer Loaders and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Bobcat 47 59 30 45 7 35 33 66 27 39
Case 25 31 18 27 3 15 5 10 20 29
Caterpillar 8 10 9 14 3 15 5 10 10 14
Gehl - - 9 14 6 30 4 8 8 11
New Holland - - - - 1 5 3 6 5 5
Total 80 100 66 100 20 100 50 100 70 100
When the market showed signs of recovery, it was Bobcat that again took the leading position.
Only two other suppliers were then offering machines with any seriousness, Caterpillar and
Case. Gehl has been a recent surprise success, an introduction by the existing Manitou dealer,
Indotruck. Others that have skid-steer loaders in their catalogue do not sell in this country.
102
Table 78. Indonesia: Distribution Networks of Suppliers of Skid-Steer Loaders, 2012
Case Probesco Disatama
Gehl Indotruck Utama
New Holland Daya Kobelco
The population is estimated at 350 units. One of the most positive aspects is their ability to work
in confined spaces, such as in narrow plantation rows, and in confined factory spaces and yards.
In the main, space is less of a problem in Indonesia, giving wheeled loaders and crawler
excavators the advantage in many instances. In farming they have found some applications in
mushroom growing and oil palm plantations; in industry to feed fuel into boilers; and in
construction to clean up sites after road repairs.
Forecast
Table 79. Indonesia: Forecast Sales of Skid-Steer Loaders, 2012-2016

(Units)
2012 2013 2014 2015 2016

60 70 80 80 80
The forward vision of some distributors is often limited, mainly the next 12 months of trading,
and the comments of manufacturers and distributors were not reassuring regarding the prospects
for skid-steer loaders. Most commentators thought the market would remain quite small and
limited in scope. Many of the reasons were the same, namely the low cost of manual labour,
which can be employed for a fraction of the cost of a machine. Most salesmen will be
concentrating on the limited industrial market for bulk materials and aggregates and the sector
will remain very much a niche area of expertise.
103
Machines Available
Table 80. Indonesia: Skid-Steer Loaders Available, 2012
Operating
Engine Capacity Product
Manufacturer Model HP Manufacturer (Kg) Source
Bobcat S130 46 Kubota 590 USA
S185 56 Kubota 839 USA
S220 75 Kubota 998 USA
S250 75 Kubota 1,134 USA
Case 410 51 Case 680 USA

420 59 Case 794 USA
430 80 Case 910 USA
435 78 Case 1,090 USA
440 89 Case 998 USA
445 80 Case 1,134 USA
465 90 Case 1,361 USA
Caterpillar 216B 50 Caterpillar 635 USA

226B 57 Caterpillar 680 USA
246C 73 Caterpillar 975 USA
252B 70 Caterpillar 1,134 USA
256C 82 Caterpillar 1,066 USA
Gehl SL1640 21 Yanmar 375 Poland

SL3840 35 Yanmar 476 USA
SL4640 62 Deutz 748 USA
SL5240 62 Deutz 862 USA
SL6640 82 Yanmar 1,179 USA
V270 84 Yanmar 1,225 USA
SL7810 99 Cummins 1,805 USA
New Holland LS140 32 Shibaura 627 USA

LS150 38 Shibaura 636 USA
LS180 67 New Holland 1,159 USA
104
ROUGH TERRAIN LIFT TRUCKS
Table 81. Indonesia: Sales of Rough Terrain Lift Trucks by Type, 2007-2011
(Units)
2007 2008 2009 2010 2011

Masted 12 12 15 - -
Telescopic 7 9 7 38 61
Total 19 21 22 38 61
It has proved to be very hard to develop any market for masted rough terrain lift trucks or
telescopic handlers. New and used industrial fork lift trucks are often employed where a rough
terrain lift truck might be more suitable, and there is a significant trade in imported second-hand
fork lift trucks from Japan. This factor alone probably undermines most of the opportunities for
telescopic handlers. Another key feature is the style of buildings, which tend to be high rise
apartment blocks rather than low rise individual housing units. Bamboo scaffolding is still used
extensively, with individual workers carrying building materials up several storeys, without the
use of mechanical assistance. In a country where labour is so cheap and abundant, the
opportunities for rough terrain lift trucks are strictly limited.
One importer has found a niche in machinery maintenance in the mines, marketing masted or
telescopic handlers for handling tyres from large equipment. There are also occasional
opportunities in plantation agriculture and in the oil industry, both sectors where foreign born
machinery managers import their practices for handling.
Production
There is no domestic production of rough terrain lift trucks.
Market Shares
After the Asian financial crisis the possibility of sales disappeared entirely for a time and so
interest to develop any market went with it. Eventually the environment became more benign.
Manitou has been working for 12 years with Indotruck, a truck and mechanical handling
105
specialist and it has developed the franchise to the point where it can sell as many as 40 units per
year. Manitou has a huge catalogue but the most interesting products are for lifting tyres off
heavy machinery. The most suitable specification is a 4.5 tonne lift capacity and a height of
8.0 metres. JCB was active with Traktor Nusantara in 2007/8 but the new agent Altrak 1978 has
been concentrating on other products until 2011.
Table 82. Indonesia: Suppliers of Rough Terrain Lift Trucks and

Their Market Shares by Type, 2007-2011
(Units)
2007 2008 2009 2010 2011

Masted
Manitou 12 12 15 - -
Total 12 12 15 - -
Telescopic
Manitou 3 4 5 29 40
Caterpillar - - - 5 13
Bobcat 1 1 2 - -
JCB 3 4 - 4 8
Total 19 21 22 38 61
Table 83. Indonesia: Distribution Networks of Suppliers of

Rough Terrain Lift Trucks, 2012
Caterpillar Trakindo
JCB Altrak 1978
Manitou Indotruck Utama
The population is probably no more than 70 units of masted machines and 160 telescopic
handlers. The main applications are in the mining and oil industries, and in agriculture.
106
Forecast
Table 84. Indonesia: Forecast Sales of Rough Terrain Lift Trucks, 2012-2016
(Units)
2012 2013 2014 2015 2016

Masted - - - - -
Telescopic 50 60 70 80 80
Total 50 60 70 80 80
The future development of this market will depend on good marketing and sales. Efforts have
been successful in mining and onshore work for the oil industry. Local distributors are often
willing, but sometimes unable, to promote a concept which is relatively new to the market, and
for which there is only very limited demand. From the local distributor’s point of view, it is far
better to concentrate on equipment that is proven to sell. Indonesia is arguably one of the most
difficult countries in which to promote the product because of the number of alternative solutions
available, from low-cost used fork lift trucks to low-cost manual labour.
Machines Available
The table below list the full ranges offered by the three suppliers for industrial and construction
applications. In practice no stock is kept in Indonesia, so most machines will be supplied to
order from the factory.
Table 85. Indonesia: Rough Terrain Lift Trucks Available, 2012
Operating Maximum
Engine Capacity Lift Product
Manufacturer Model HP Manufacturer (Tonnes) (Metres) Source
Bobcat T2250 75 Kubota 2.2 5.0 France
T2556 100 Perkins 2.5 5.6 France
T3571/L 100 Perkins 3.5 7.1 France
TR35160 102 Iveco 3.5 15.5 Italy
TR45190 144 Perkins 4.5 18.4 Italy
(continued)
107
Table 85. Indonesia: Rough Terrain Lift Trucks Available, 2012 (continued)
Operating Maximum
Caterpillar TH336 100-127 Caterpillar 3.3 6.1 USA
TH406 100-127 Caterpillar 3.7 6.1 USA
TH407 100-125 Caterpillar 3.7 7.3 USA
TH414 125 Caterpillar 3.7 13.7 USA
JCB 520-40 50 Perkins 2.0 4.0 UK

524-50 85 Perkins 2.4 5.0 UK
531-70 85/100 JCB 3.0 6.8 UK
541-70 102 JCB 4.1 6.8 UK
536-60 100/125 JCB 3.6 6.2 UK
535-95 85/100 JCB 3.5 9.5 UK
533-105 85/100 JCB 3.3 10.5 UK
535-125 85/100 JCB 3.5 12.5 UK
535-140 85/100 JCB 3.5 13.8 UK
540-140 121 JCB 4.0 14.0 UK
540-170 102 JCB 4.0 16.7 UK
Manitou BT 420 51 Perkins 2.0 4.0 France

BT 425 51 Perkins 2.5 4.0 France
MT 523 58 Perkins 2.3 5.0 France
MLT 523 T 85 Perkins 2.3 4.9 France
BT 425 51 Perkins 2.5 4.0 France
MLT 627 101 Perkins 2.7 5.5 France
MLA 628-120 LSU 123 Perkins 2.8 5.2 France
MLT 630 T 101/123 Perkins 3.0 6.1 France
MHT 860 L 132 Perkins 3.0 8.1 Italy
MT 1030 S/ST 84/100 Perkins 3.0 10.0 France
MLT 731 T 101 Perkins 3.1 6.9 France
MT 1033 HLT 101 Perkins 3.3 9.6 France
MLT 634 101/123 Perkins 3.4 6.1 France
MT 1235 S/ST 82/100 Perkins 3.5 12.0 France
MLA 1035 LT LSU 101 Perkins 3.5 9.6 France
MT 1436R 87 Perkins 3.6 13.5 France
MLT 940 L-120 LSU 123 Perkins 4.0 9.0 France
MT 940 LT 101 Perkins 4.0 9.0 France
MT 1240 Ultra 100 Perkins 4.0 11.6 France
MT 1435 H SLT 100 Perkins 4.0 13.5 France
MT 1440/A 101 Perkins 4.0 13.5 France
MT 1840R/A/EP 101 Perkins 4.0 17.5 France
MLT 940L 123 Perkins 4.0 9.0 France
MLT 845-120 LSU 123 Perkins 4.5 7.6 France
(continued)
108
Table 85. Indonesia: Rough Terrain Lift Trucks Available, 2012 (continued)
Operating Maximum
Manitou MHT 10120 L 175 Mercedes-Benz 12.0 9.6 Italy
(continued) MHT 7140 175 Mercedes-Benz 14.0 7.0 Italy
MHT 10160 L 175 Mercedes-Benz 16.0 9.7 Italy
MHT 10210 175 Mercedes-Benz 21.0 9.7 Italy
– Rotary MRT 1432 101 Perkins 3.2 13.8 Italy

MRT 1635 101 Perkins 3.5 15.8 Italy
MRT 1850 150 Mercedes-Benz 5.0 17.9 Italy
MOTOR GRADERS
Table 86. Indonesia: Sales of Motor Graders, 2007-2011

(Units)
2007 2008 2009 2010 2011

390 586 395 629 1,101
The 1990s market for motor graders peaked at more than 300 units in 1995, after which sales
levelled off until 1997, when demand collapsed and virtually disappeared for two years. The
road programme was curtailed, but there was a slow increase in sales from 2001 to 2006.
Demand then grew quickly in 2007 and in 2008 the market reached record levels. Two positive
factors coincided in that year, heavy forestry activity and an expansion of investment by mining
contractors. On the other hand, the year finished poorly, with the effects of the world financial
crisis affecting commodity prices and the willingness to invest in several grader using industries
– mining, forestry and oil palm plantations. In consequence 2009 was a quieter year, with sales
down by a third, compared to 2008. They recovered very well in 2010, with sales to mines
reaching 300 units but being only half of the total. Mine sales continued into 2011 at a fast pace,
109
although at the same time sales to the plantations were very good and formed another of the
major factors behind the record sales.
The single most popular size of grader is classified at between 135 and 150 horsepower, with the
once locally produced Komatsu GD511A-1 with its 135 horsepower engine as the best-selling
machine. Just below it comes the Caterpillar 120K, as a successor to the long serving and
popular H series, with a 125 horsepower engine that has an optional boost to 140 horsepower.
This means that these two sizes account for two thirds of demand.
Table 87. Indonesia: Sales of Motor Graders by Horsepower Category, 2011
Horsepower Units %
120-134 330 30
135-145 380 35
170-210 201 18
211-300 190 17
Total 1,101 100
Larger machines come in two classes; 200 horsepower machines that are either Japanese units or
Chinese products that can be sold for 35 per cent less and so to a certain extent expand the
market, simply by making the grader a less expensive proposition; and a class of expensive
machines around 280 horsepower destined for the biggest mines.
Production
Table 88. Indonesia: Production of Motor Graders by Manufacturer, 2007-2011

(Units)
2007 2008 2009 2010 2011

Komatsu 170 270 - - -
Until the late 1990s Caterpillar was manufacturing graders locally. Komatsu production lasted
until 2008. From 2004 to 2008 it built the articulated grader GD511A-1.
110
Market Shares
Table 89. Indonesia: Suppliers of Motor Graders and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Komatsu 199 51 284 48 183 46 355 56 544 49
Caterpillar 101 26 159 27 130 33 120 19 320 29
Mitsubishi 47 12 51 9 22 6 78 12 107 10
Xiagong - - 30 5 20 5 30 5 50 5
Case 30 8 30 5 20 5 15 2 20 2
XCMG 10 3 20 3 10 3 20 3 20 2
Volvo - - 1 - 3 1 5 1 19 2
LiuGong - - 11 2 5 1 6 1 15 1
John Deere - - - - 2 1 - - 6 1
Total 390 100 586 100 395 100 629 100 1,101 100
The leading supplier is Komatsu and from 2004 to 2008 its best-selling machine was the locally
assembled GD511A-1. A similar unit now comes instead from Japan. The main customers are
mining companies and their contractors, and palm oil estates. Some construction buyers
purchase graders but in recent years the state business has not returned.
Caterpillar has been doing better recently, with its share of the business rising from around
25 per cent to nearly 30 per cent. Its best seller is the 120H/K model rated at
125-140 horsepower, with a variable horsepower feature that is common on North American
machines.
Mitsubishi’s once successful presence in the country has been declining recently. The dealer
Equipindo is a specialist in road machinery and its sales are made up of the MG330 model that is
sold to road contractors and plantations. They come from Mitsubishi’s joint venture
manufacturing facility in Thailand that has now taken over all grader production.
Six Chinese manufacturers now sell their products here, with DTCM, Lonking and Sany all
starting in 2012. All of them are part of marketing programmes to promote Chinese products in
general and although they have a big price advantage, they are designs that are really made for
the construction industry in their home market. It may prove quite hard to persuade mining,
plantation and forest operators to forsake the benefits of high quality support as offered by the
two market leaders. It would suit Chinese products if the construction industry were more
111
important and peopled by small sub-contractors to whom the initial purchase price is a huge
consideration, but for the moment the country is not in that state.
Table 90. Indonesia: Distribution Networks of Suppliers of Motor Graders, 2012
Case Probesco
Dingsheng Tiangong Berca Mandiri Perkasa
John Deere Hexindo Adiperkasa
Komatsu United Tractors
Lonking Kasana Teknindo
Mitsubishi Equipindo
Sany JIMAC
Volvo Indotruck Utama, Intraco Penta
XCMG Gaya Makmur Tractors
Xiagong Oscar Mas
The population is estimated at 3,300 units. Many are working for Highway and Public Works
Departments on road maintenance duties, particularly small rural roads made from compacted
dirt. The main reason for the increase in sales since 2001 has been demand from the oil palm
estates and mining contractors.
Forecast
Table 91. Indonesia: Forecast Sales of Motor Graders, 2012-2016

(Units)
2012 2013 2014 2015 2016

800 650 600 550 500
The motor grader is not a product where demand increases suddenly but there have been
spectacularly high sales in 2010 and 2011. 85 per cent of those were fuelled by the rush to invest
in the mines and the opening up of plantations for oil palm. In 2012 there are warning signs from
coal and other mineral prices on the one hand; on the other the palm oil business must peak at
some point. At the moment the method of entry into that industry does involve heavy capital
112
expenditure to change forest into plantation land, with the proviso that the investor has to wait
five years even for the first crop to start paying him back.
The grader business also has one other characteristic, namely that the machines last 20 years or
more, so any surplus can stay around for many years. The market is unlikely to grow
substantially in the next few years, but rather to cool off. Mining, agriculture and forestry will
continue to underpin the market and provide the demand of the next few years but not so
exuberantly as in 2010 and 2011. If and when the government decides to allocate substantial
funds to improve the poor road network, then some uplift can be added to these figures.
Machines Available
Table 92. Indonesia: Motor Graders Available, 2012
Service
Weight Diesel Engine Product
Supplier Model (Tonnes) HP Manufacturer Source
Case 845 DHP 13.5 150 Cummins Brazil
865 VHP 14.6 195 Cummins Brazil
885 17.3 220 Cummins Brazil
Caterpillar 120K 12.0 125-140 Caterpillar USA

12K 13.7 125-140 Caterpillar USA
14M 21.4 259-294 Caterpillar USA
16M 24.7 265-281 Caterpillar USA
24M 62.0 500 Caterpillar USA
Dingsheng Tiangong 120G 9.8 134 Cummins China

160G 13.5 168 Cummins China
John Deere 670G 15.3 155-195 John Deere USA

672G 6WD 16.4 170-195 John Deere USA
770G 15.8 165-230 John Deere USA
870G 16.4 180-255 John Deere USA
Komatsu GD511A-1 10.8 135 Komatsu Japan

GD705A-4 12.5 200 Komatsu Japan
GD663A-2 13.4 180 Komatsu Japan
GD555-5 15.1 193 Komatsu Japan
(continued)
113
Table 92. Indonesia: Motor Graders Available, 2012 (continued)
Service
Weight Diesel Engine Product
Supplier Model (Tonnes) HP Manufacturer Source
Komatsu GD825A-2 17.6 280 Komatsu Japan
(continued) GD755-5R 21.7 286 Komatsu Japan
LiuGong CLG 416 13.7 173 Shanghai Diesel China

CLG 418 15.5 215 Shanghai Diesel China
Lonking CDM 1165 15.0 165 Cummins China
Mitsubishi MG 330 11.0 135 Mitsubishi Thailand

MG 430 12.2 155 Mitsubishi Thailand
MG 530 16.8 185 Mitsubishi Thailand
Volvo G930 15.6 155-195 Volvo USA

G940 16.0 175-215 Volvo USA
G946 16.6 195-235 Volvo USA
G960 16.7 195-235 Volvo USA
G970 17.7 210-250 Volvo USA
G976 18.4 225-265 Volvo USA
G990 21.0 225-265 Volvo USA
XCMG GR135 11.0 136 Dongfeng Cummins China

GR165 15.0 170 Shanghai Diesel China
GR215 16.5 218 Dongfeng Cummins China
Xiagong XG31651 14.8 175 Cummins China

XG31802 15.5 180 Cummins China
MOTOR SCRAPERS
Table 93. Indonesia: Sales of Motor Scrapers, 2007-2011

(Units)
2007 2008 2009 2010 2011

- 2 2 - -
114
The market for motor scrapers is minimal, which is partly due to the type of terrain and partly the
nature of the topsoil. Also, graders are used where motor scrapers might be employed in other
countries. Graders are much easier to transport than scrapers, which is an issue in the mining
areas of Kalimantan and Sulawesi where many roads are rudimentary.
Production
There is no domestic production of motor scrapers.
Market Shares
Caterpillar is the only supplier of scrapers. The last sale was of the model 623G, with 18 m3
bowl capacity, sold in 2009 to KPC (Kalimantan Prima Coal) for use in Sangatta, East
Kalimantan.
Table 94. Indonesia: Suppliers of Motor Scrapers and Their Market Shares, 2007-2011
(Units)
2007 2008 2009 2010 2011

Caterpillar - 2 2 - -
Total - 2 2 - -
Including second-hand machines which have been imported for the mining industry, the total
active population is estimated at 100 units. The majority of motor scrapers in the population are
Caterpillar machines, mainly medium sized, not elevating scrapers with 16-20 m3 bowls.
Forecast
Table 95. Indonesia: Forecast Sales of Motor Scrapers, 2012-2016

(Units)
2012 2013 2014 2015 2016

2 1 1 2 2
115
Future growth in the motor scraper market is forecast to be insignificant. Demand is mainly
from the mining sector at the rate of one or two machines a year. In the coal mining areas
overburden is removed with bulldozers, excavators and graders as the ground conditions are not
necessarily suitable for motor scrapers. There will, nevertheless, be demand for a small number
of machines each year.
DUMP TRUCKS
The market for dump trucks was transformed after 2002, with demand increasing dramatically
from a very low level. The country has traditionally preferred on-off road 10-wheel trucks that
could drive the long distances between limestone quarries and cement works, and between mines
and shipping points. This all changed with the rising price of energy and, as one official at the
Ministry of Energy and Mineral Resources said “Kalimantan is effectively one big coalmine”. In
fact coal mining takes place in Kalimantan, Sumatra and Sulawesi, and the extent of these
deposits is such that seams less than one metre thick are not even counted in the official reserves.
Coal production increased from 114 million tonnes in 2003 to 257 million tonnes in 2010. This
was achieved only by the incorporation of large amounts of new excavating and hauling
machinery. The increase in demand for both articulated and rigid trucks is shown below. It is all
the more impressive when one recalls that as late as 2002 sales were still only 150 units, both
types combined. The first peak in 2008, at 1,233 units happened paradoxically when coal
production was falling and the mining industry was showing nil overall growth. Nevertheless the
confidence to invest existed and there is no doubt at all that it comes now from the potential for
economic growth in Asia as a whole. Although the government has indicated that it wants to
increase domestic coal use in the future, it is the export potential that attracts investors to
Indonesia. Understandably, the 2009 sales figures reflected a certain nervousness after the
Lehman Bros. collapse. Articulated dump trucks were worse affected and rapidly declined from
the peak seen in 2008.
Strong growth returned in 2010 and by 2011 a record sales level was reached. To put it in
perspective, sales in the country were in that year more or less the same as in the whole of
North America. There was a massive rush to invest in productive machinery, so rigid trucks
jumped by 64 per cent and articulated dump trucks by a little more, 66 per cent.
116
Table 96. Indonesia: Sales of Dump Trucks by Type, 2007-2011
2007 2008 2009 2010 2011

Articulated 120 23 419 34 246 25 470 31 780 31
Rigid 400 77 813 66 736 75 1,063 69 1,739 69
Total 520 100 1,233 100 982 100 1,533 100 2,519 100
Sales of articulated trucks have increased substantially over the last decade, with the emphasis
now on larger capacity machines. The articulated truck market took off in the 1990s after a slow
beginning. Articulated trucks can work in high rainfall areas, through the rainy seasons and in
sticky and slippery conditions where a rigid truck would find it hard to gain traction or sufficient
stability. The main areas where they are used are in the coal mines of East and West Kalimantan,
in South Sulawesi, Sumatra and in East Bali and Bangka Island.
There is still some demand for smaller trucks under 30 tonnes, but manufacturers have made
considerable progress in developing larger, more efficient articulated trucks of higher capacity.
Most mining companies are now choosing these larger models as the drive for productivity is
great. The trend has become particularly apparent in the years since the export coal trade began
to flourish and contractors have sought to optimise their investment. Most of the new machines
sold by Caterpillar, for instance, are the 740 model with 36 tonnes capacity.
The rigid dump truck market has evolved rapidly as it has grown.
Table 97. Indonesia: Sales of Rigid Dump Trucks by Size Category, 2007-2011
2007 2008 2009 2010 2011

Tonnes Units % Units % Units % Units % Units %
Under 40 20 5 20 2 20 3 - - - -
40-50 40 10 85 10 115 16 53 5 - -
51-60 130 33 418 51 213 29 340 32 522 30
61-80 50 13 20 2 30 4 32 3 35 2
81-100 110 28 200 25 295 40 532 50 1,043 60
Over 100 50 13 70 9 63 9 106 10 139 8
Total 400 100 813 100 736 100 1,063 100 1,739 100
As the contractors have accelerated their levels of extraction, the problem of congestion within
some of the mines has become chronic; the only solution has been to invest in larger rigid trucks.
117
But the limiting factor is the size of the roads into and out of the mines, while the load bearing
capacity of some unmade roads is of critical consideration. Thus trucks in the 51-60 tonne
category remain the most practical for all but the largest mines and accounted for nearly 40 per
cent of the units sold in the period from 2007 to 2009. The locally assembled Komatsu HD465 is
the most popular rigid truck in this class; Caterpillar’s mainstay in this size category is the
773 model at 54.4 tonnes capacity. In terms of overburden removal and coal and ore haulage
capacity the tendency is upwards, but the 61-80 tonne category has lost its former glory as mine
operators establish facilities that need much more transport capacity. 90 tonne trucks are the
favourite solution of the moment and were the best-selling size in 2009 to 2011.
Only a few of the mines can cope with trucks over 100 tonnes, but the trend is towards larger
electric drive machines from 200 to 400 tonnes capacity for the two or three very large coal
mines with easy access to the sea. Even in the short period represented by 2011 about 150 trucks
of 150 tonnes and more were sold and installed. Caterpillar has one of its largest fleets of 785
(150 tonnes capacity) and 793 (240 tonnes capacity) in Kalimantan. The island does not have
any rail system, so the miners have to organise their own transport of coal to the sea for export.
The smaller mines in the more inaccessible parts of Kalimantan are often compelled to use
smaller trucks, which they then discharge on to barges for shipment to the coast. This can be a
tricky operation as some rivers have insufficient depth in the dry season.
Production
Komatsu has been producing rigid dump trucks at its Jakarta factory since 2004. The two
models produced are the HD465-7 with 55 tonnes capacity and the 91 tonne capacity HD785-5.
The mix between the two can be quite variable; production used to be dominated by the smaller
model but in 2009 260 units were of the large truck and only 90 units were the 55 tonne truck.
By 2011 the large model was even more dominant, accounting for nearly 800 units, as against
300 units of the smaller type. Production is highly cyclical because of the investment and fleet
replacement policies of the coal mines.
Table 98. Indonesia: Production of Rigid Dump Trucks by Manufacturer, 2007-2011

(Units)
2007 2008 2009 2010 2011

Komatsu 150 400 350 700 1,100
118
Caterpillar is building a plant at Batam to make chassis and bowls for dump trucks, specifically
the 785 and 789 sizes. The company is investing about $150 million in the new facility, which is
expected to be operational in 2012 for truck bodies, with the first trucks due produced in the third
quarter of 2013.
Component Sourcing
Table 99. Komatsu Indonesia: Component Sourcing for Rigid Dump Trucks, 2012
Diesel Engines Komatsu Japan

Transmissions Komatsu Japan
Hydraulics Komatsu Japan
Chassis In-house
Frames In-house
Cabins Local sub-contractor
Most of the truck is imported in kit form from Japan. The local plant in Cilincing does, however,
make main frames, rear cross assemblies and side members, which it also exports.
On a different subject, Caterpillar has announced that it will produce dump trucks and bowls in a
new plant in Batam, specifically the 785 and 789 sizes. The company is investing about $150
million in the new facility, which is expected to be operational in 2012 for truck bodies, with the
first trucks due to be produced in the third quarter of 2013.
Market Shares
Articulated Dump Trucks
Table 100. Indonesia: Suppliers of Articulated Dump Trucks and

2007 2008 2009 2010 2011

Volvo 48 40 107 26 116 47 232 49 476 61
Caterpillar 35 30 257 61 112 46 211 45 176 23
Komatsu 12 10 50 12 13 5 24 5 128 16
Bell/Hitachi 24 20 5 1 5 2 3 1 - -
Total 120 100 419 100 246 100 470 100 780 100
119
Volvo still accounts for 45 per cent and more of the articulated dump truck market with its
winning A35D model, and more recently with the higher capacity A40 model with a maximum
load of 37 tonnes.
Caterpillar is the second most important supplier, with all of its sales in 2011 accounted for by
the 740 model rated at 36 tonnes capacity. Caterpillar’s strength is its ability to sell articulated
trucks in conjunction with other products such as excavators and rigid dump trucks, encompassed
in a formidable service package. Komatsu is selling only the HM400 model, with 34 tonnes
capacity.
Rigid Dump Trucks
Komatsu and Caterpillar jointly supply more than 95 per cent of machines sold. Komatsu has
strengthened its position in the last three years, partly because of its sales to a captive contractor,
owned by the dealer, United Tractors, as well as a captive coal mine. Komatsu has also adopted
a competitive pricing policy, which Caterpillar has found hard to keep up with. Five per cent of
Komatsu’s sales are for electric drive machines over 100 tonnes capacity but most of its sales are
still made with the 55 and 91 tonne models that it makes locally.
Caterpillar is the second major force in the market, and in reaction to Komatsu’s aggressive
stance, has decided to introduce more competitively priced 90 tonne trucks made in India. It sold
230 of this model 777 in 2011.
Table 101. Indonesia: Suppliers of Rigid Dump Trucks

and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Komatsu 200 50 557 69 439 60 745 70 1,166 67
Caterpillar 170 43 172 21 235 32 269 25 503 29
BEML - - - - - - 10 1 10 1
Hitachi 20 5 20 2 32 4 20 2 36 2
NHL - - - - - - 10 1 20 1
Terex 10 3 20 2 20 3 4 - 4 -
BZK - - 44 5 10 1 5 - - -
Total 400 100 813 100 736 100 1,063 100 1,739 100
120
The remainder of the market is very small. Some alternative suppliers do exist, but with much
smaller volumes of machines installed they do not offer the level of service that the two giants of
the market can use to win customers. The Indian manufacturer BEML announced a sale of what
it described as 127 units of mining equipment in mid-2009 and set up a local presence. Since
then not many of the machines have apparently not been delivered because of administrative
problems, but 20 units of the 54 tonne BH60M model have been installed.
Hitachi has been expanding its range of mining excavators and its capacity to deliver them, so it
is more able to sell a ‘package’ of equipment to the mines including excavators and dump trucks
than in the past. It can now challenge the dominance of Komatsu and Caterpillar in this respect
but sales have been modest so far, accounting for around five per cent of the market. Terex has
had modest results against formidable competition from concentrating sales and marketing in
company-owned hands and has now opted for a dealer, United Equipment. It also has the
problem that the Doosan dealer Kobexindo sells a 100 tonne truck from NHL of China that is a
licensed design of the Scottish original, but with Chinese production costs.
BZK was the name of the new Beijing dump truck factory in China, as used by the importer
Indotruck that took on its franchise at the end of 2007. It enjoyed a very successful first year
with 44 sales in 2008. These are simple robust trucks and those sold have only a 20 tonne
capacity. Sales faded after the initial success and as Indotruck has dropped all Chinese
construction equipment in favour of Volvo products, the product has gone to a new dealer. It
also goes under a new name, TRXBuild.
The list of suppliers is below.
Table 102. Indonesia: Distribution Networks of Suppliers of Dump Trucks, 2012
Bell Hexindo Adiperkasa
BEML BEML Indonesia
Doosan Kobexindo
Hitachi Hexindo Adiperkasa
Liebherr Liebherr-Indonesia
NHL Kobexindo
Terex United Equipment
TRXBuild Airindo Sakti
121
The population of off-highway trucks has increased dramatically in the last 10 years. The
number of rigid trucks is estimated at 6,000 units, compared to only 600 units 13 years ago. It
has tripled in the last five years alone. The population of articulated dump trucks is around 2,200
machines, compared to 450 in 1997. It has almost tripled since 2005.
The mining industry is the largest market for dump trucks, accounting for over 90 per cent of
trucks sold over the last decade. The cement industry is the second largest end-user of dump
trucks, followed by sand, stone and aggregate quarrying. However, on-off road 10-wheel trucks
tend to be favoured in the quarrying sector. Large dump trucks will be required for some of the
new infrastructure projects planned (but not yet executed) including new coal fired power
stations.
Forecast
Table 103. Indonesia: Forecast Sales of Rigid and Articulated Dump Trucks, 2012-2016
2012 2013 2014 2015 2016

Articulated 700 24 700 26 800 32 800 32 1,000 36
Rigid 1,500 76 1,700 74 1,700 68 1,700 68 1,800 64
Total 2,200 100 2,400 100 2,500 100 2,500 100 2,800 100
The mining industry has just experienced a relatively short period of massive growth, driven by
high world energy prices and rising metals and minerals prices. Indonesia has long-term
contracts to supply coal to countries such as China, India and Japan. Most of the country’s coal
has low sulphur content, is comparatively easily extracted through open cast methods and is
abundant. The drawback is that as much as energy prices will be high, so they will also be
unstable. In general the country wants to increase coal production for domestic needs and
exports and on a scale that will need a lot of machinery.
One has to accept that the huge sales of trucks as seen in 2011 must subside and there are enough
incentives for that to happen fairly fast. The articulated type is now well established as a hauler
for these particular conditions and should sustain a demand of around 700 to 800 units per
annum. It is even possible that its popularity may well grow. The bigger question is whether
rigid dump truck demand can stay as high as 1,700 units. The forecast assumes that will happen.
122
The coal price should stabilise by 2013, and China’s energy needs will make a ready market for
Indonesian coal. In the long term, that market will become less important as it changes to being
more self-sufficient in thermal coal but that will take a long time and when it does other markets
will be there, domestic and international. Other minerals will probably enjoy high selling prices
and therefore encourage investment in production resources.
Machines Available
Table 104. Indonesia: Articulated Dump Trucks Available, 2012
Engine Payload Product

Caterpillar 725 304 Caterpillar 22.7 UK
730 318 Caterpillar 27.2 UK
730 Ejector 320 Caterpillar 27.2 UK
740 Ejector 453 Caterpillar 36.3 UK
Doosan MT41 438 Scania 37.2 Norway

MT51 508 Cummins 46.3 Norway
Hitachi AH250-D 265 Mercedes-Benz 23.2 South Africa

AH300-D 311 Mercedes-Benz 27.3 South Africa
A500-D 512 Mercedes-Benz 45.4 South Africa
Komatsu HM400-1 430 Komatsu 34.3 Japan
Terex TA25 266 Cummins 23.0 UK

TA27 319 Cummins 25.0 UK
TA30 333 Cummins 28.0 UK
TA35 388 DDC 32.0 UK
TA40 437 DDC 36.5 UK
Volvo A25E 303 Volvo 24.0 Sweden

A25E 4x4 303 Volvo 24.0 Sweden
A30E 341 Volvo 28.0 Sweden
123
Table 105. Indonesia: Rigid Dump Trucks Available, 2012
Engine Payload Product

BEML BH 60M 650 Cummins 54.4 India
Caterpillar 770 510 Caterpillar 36.3 USA

772 597 Caterpillar 45.4 USA
773D 740 Caterpillar 54.4 India
775F 787 Caterpillar 63.5 USA
777D 1,000 Caterpillar 91.0 India
777F 1,016 Caterpillar 91.0 USA
785C 1,348 Caterpillar 150.0 USA
789C 1,770 Caterpillar 195.0 USA
793D 2,337 Caterpillar 240.0 USA
797B 3,370 Caterpillar 380.0 USA
Hitachi EH600 400 Cummins 30.1 Canada

EH750-3 525 Detroit Diesel 38.1 Canada
EH1100-3 697 Detroit Diesel 64.9 Canada
EH1700-3 1,120 Cummins 88.6 Canada
EH3500AC II 2,000 Detroit Diesel 171.0 Japan
EH4000AC II 2,598 Detroit Diesel 254.0 Japan
EH4500-2 2,699 Detroit Diesel 254.0 Japan
EH5000 2,699 Detroit Diesel 286.0 Japan
Komatsu HD325-6 488 Komatsu 32.0 Japan

HD325-7R 498 Komatsu 36.5 Japan
HD405-6 488 Komatsu 40.0 Japan
HD465-7R 715 Komatsu 55.0 Indonesia
HD605-7 715 Komatsu 63.0 Japan
HD785-5 1,010 Komatsu 91.0 Indonesia
HD785-7R 1,178 Komatsu 91.0 Indonesia
HD1500-5 1,406 Komatsu 149.0 Japan
730E 1,860 Komatsu 186.0 USA
830E-AC 2,360 Komatsu 228.0 USA
830E 2,360 Komatsu 231.0 USA
930E-3 2,550 Komatsu 290.0 USA
Liebherr T282B 3,650 MTU/DD 363.0 USA
NHL TR50 525 Cummins 45.0 China

TR100 1,065 Cummins 91.0 China
Terex TR50 525 Cummins 45.0 UK

TR60 659 Cummins 55.0 UK
TR100 1,065 Cummins 91.0 UK
TRXBuild D20 250 Cummins 20.0 China

D32 330 Cummins 21.0 China
D52 600 Cummins 32.0 China
124
COMPACTION EQUIPMENT
Table 106. Indonesia: Sales of Ride-on Compaction Equipment by Type, 2007-2011
2007 2008 2009 2010 2011

Tandem 65 15 140 17 85 16 58 6 236 18
Self-Propelled 375 84 688 83 428 83 869 94 1,084 82
Pneumatic-Tyred Rollers (PTR) 5 1 5 1 5 1 2 - 6 -
Total 445 100 833 100 518 100 929 100 1,326 100
Sales of compaction equipment have been traditionally closely related to investment in new
roads. There has been very little expenditure on new roads before 2011 during the five years
shown above, which is reflected in the modest sales figures for most types of compaction
equipment, especially in the absence of the type of larger tandem roller that is inevitably
involved in building a new highway. The other background factor is that roads have been
highlighted as one of the finest examples of how corruption drains away any benefit from state
expenditure. Local roads need money that comes through so many levels of government that by
the time every official at each level has subtracted his ‘take’ there is very little left to do what
was intended.
The recovery since 2001 has been slow and patchy, with the main emphasis on self-propelled/
single drum rollers used for the compaction of basic dirt roads. The faltering of demand in 2009
was a good example. There is still very little demand for compaction equipment for asphalt
surfaces, which means that sales of pneumatic-tyred rollers are minimal.
The market for tandem rollers depends on orders from the government and that originates from
the one certain factor for Indonesia’s roads – potholes caused by the rainy season. Unfortunately
even this repairing is an activity that varies from year to year, since the repair budget is set and
reset every year. Sales volumes are likely to remain small and to vary wildly according to how
well the road authorities’ budgets are faring. From 2006 to 2010 only 300 tandem rollers were
sold, and most of those have been very small repairing rollers below three tonnes’ service
weight. In 2011 some tenders were executed for 4.0 tonne tandems, which boosted the market.
125
Self-propelled rollers thankfully sell much better. While the state does use these machines for
rural roads, the reason why sales have gone so well since 2006 is the huge expansion of private
roads in plantations, forests and mines. The legal oil palm plantations now occupy 138,000 km2,
for which they need supporting infrastructure such as buildings, roads and services. The oil palm
area has grown by 50 per cent in the last five years. Forestry has the same needs, whether legal
or illegal. Mine owners use self-propelled rollers for basic access roads in and out of mining
sites. Coal production is the headline item, that has doubled its output since 2006 but equally a
valuable ore like nickel has managed the same rate of increase in recent years. The conjunction
of these three activities has pushed sales of soil rollers (typically the 11 tonne size) from 166
units in 2005 to a peak of 1,084 units in 2011.
Pneumatic-tyred rollers are used on highways to seal the asphalt surface after the passage of
the tandem roller. The lack of new road building and the limited amount of resurfacing work
means that few of these machines are sold.
Production
Sakai Indonesia dates back to 1970. The rollers are built at a site on a purpose-built industrial
estate in Bekasi, the EJIP Industrial Estate, about 40 kilometres from Jakarta. The site is bonded
but not large, so Sakai established PT Sakai Road Machinery Indonesia in 2008 at another site on
the estate, specifically to make rollers for the domestic market.
Table 107. Indonesia: Production of Compaction Equipment by Manufacturer 2007-2011

(Units)
2007 2008 2009 2010 2011

Sakai Indonesia 600 850 400 779 759
In 2009 there was a single self-propelled model in production, the SV512D in two versions, with
an Isuzu engine for one of the Indonesian dealers and for export; and powered by a Perkins
engine for the other. In 2010 the factory started production of the model SV505, essentially the
same product but with a Cummins engine destined for the North American market.
In August 2012 it began production of a completely new model, the SV520 and stopped the two
existing models. Technical changes are a larger pump and engines to meet Tier 2 and 3
standards.
126
Under the company charter Sakai Indonesia is obliged to export two thirds of its production
every year. This level of output is not often achieved, and in reality the output depends on the
fortunes of the local market. All markets had a poor year in 2009, as dealers were obliged to
destock in the face of falling demand. By 2011 it had got back up to a 58 per cent export ratio.
Component Sourcing
The majority of steel structural parts, chassis, frames and rolls are made in-house. Engine
mountings come from Japan, as does the vibrator. Sakai buys a number of welded and forged
components from local Indonesian suppliers, including PT Katsushiro and Shibaura Shearing.
KM Toa, a local branch of a Japanese manufacturer, makes the cab. Diesel engines come from
Japan and the UK, while the transmissions are imported from Dana in Italy. Currently BKT of
India supplies the tyres and Yokohama Rubber Thailand the hoses.
Exports
The plant sells to Vietnam, Thailand, Cambodia, Laos and Burma and since 2010 North
America. In the past it recorded some sales in the Middle East and Africa. The model SV520
will be for sale all over the world. It will be offered with a Tier 2 engine (Isuzu) and Tier 3
(Cummins).
Market Shares
Table 108. Indonesia: Suppliers of Compaction Equipment and

2007 2008 2009 2010 2011

Sakai 117 26 254 30 168 32 506 54 794 60
Bomag 148 33 253 30 130 25 128 14 208 16
Caterpillar 50 11 60 7 42 8 80 9 120 9
Hamm 40 9 60 7 20 4 46 5 90 7
Volvo - - 109 13 88 17 125 13 54 4
Xiagong - - 40 5 30 6 22 2 32 2
LiuGong 3 1 14 2 5 1 10 1 15 1
Ammann 25 6 30 4 20 4 5 1 10 1
Dynapac 12 3 13 2 15 3 7 1 3 -
Ingersoll-Rand 50 11 - - - - - - - -
Total 445 100 833 100 518 100 929 100 1,326 100
127
Sakai, Bomag and Caterpillar account for 70 to 80 per cent of overall demand. When the market
was at its previous peak in the mid-1990s, Bomag was the market leader with a share of more
than 20 per cent but in the years of recession from 1998 to 2001, most established suppliers
became inactive. As sales have become stronger, Sakai has emerged as the dominant force.

Their Market Shares by Type, 2010
Self-
Tandem Propelled PTR Total
Sakai 5 9 500 58 1 50 506 54
Bomag 5 9 123 14 - - 128 14
Volvo 5 9 120 14 - - 125 13
Caterpillar 9 16 70 8 1 50 80 9
Hamm 30 52 16 2 - - 46 5
Xiagong 2 3 20 2 - - 22 2
LiuGong - - 10 1 - - 10 1
Dynapac 2 3 5 1 - - 7 1
Ammann - - 5 1 - - 5 1
Total 58 100 869 100 2 100 929 100

Their Market Shares by Type, 2011
Self-
Tandem Propelled PTR Total
Sakai 70 30 720 66 4 67 794 60
Bomag 55 23 153 14 - - 208 16
Caterpillar 20 8 100 9 - - 120 9
Hamm 55 23 35 3 - - 90 7
Volvo 27 11 25 2 2 33 54 4
Xiagong 2 1 30 3 - - 32 2
LiuGong - - 15 1 - - 15 1
Ammann 5 2 5 - - - 10 1
Dynapac 2 1 1 - - - 3 -
Total 236 100 1,084 100 6 100 1,326 100
Tandem: The product sold is essentially the small repairing tandem used to mend the roads of
Western Europe and Japan. The leading suppliers are therefore, not surprisingly, Sakai with
30 per cent and Bomag and Hamm with 23 per cent.
128
Self-Propelled: This is the core of the compaction equipment market, representing about 80 per
cent of all roller sales, even when the tandem market has improved. Sakai is the dominant
supplier with its best-selling 10 tonne SV512 and accounts for 60 per cent and more of the
segment. Bomag has the massive strength of United Tractors to aid it and has won as much as
30 per cent of the market with its BW213, although recently its share has halved. Caterpillar
has seemingly ceased gaining market share in the market in the last three years. Volvo has been
as high as 19 per cent in 2009 but instability over the distribution arrangements interrupted its
performance in 2011 and its sales were very low.
Chinese suppliers have made their presence felt in the market since 2007. In their favour they
have low selling prices and can field versions with simple mechanical transmissions but they
have not gone far. It is probably a question of finding a commercial force willing to push into
what is a very established and rather small market. This is difficult, as all players in the
construction equipment market know well enough that after the two market leaders, others sell
little. 2011 saw a huge increase in exports of Chinese compactors, but this would appear to be
explained by the presence of used machines and the launching of several well-known brands (see
below).
Table 111. Indonesia: Distribution Networks of Suppliers of Compaction Equipment, 2011
Ammann Uniquip Indonesia
Bomag United Tractors
Dynapac Probesco
JCB Altrak 1978
Hamm Gaya Makmur Tractors
Sakai Traktor Nusantara; Equipindo
Sany JIMAC
Xiagong Oscar Mas
Yituo Kasana Teknindo
Sakai products are, unusually, supplied through two outlets. In 2004 Equipindo took them on,
followed in 2007 by Traktor Nusantara, which took it to replace the lost Dynapac franchise. The
latter sells little except the Perkins engine soil roller from the local factory but nevertheless
managed nearly 250 units in 2011. The other change of note is that yet again the Dynapac
franchise has moved. Altrak moved in 2012 from Dynapac to sell JCB compaction equipment,
so the franchise has gone to Probesco, the Case construction equipment dealer.
129
More Chinese products have appeared recently, Yituo through the fork lift truck dealer Kasana
Teknindo and Sany through JIMAC. Nevertheless, some major manufacturers from that country
are blocked by the existing commitments of their dealers in other products. Lonking cannot sell
compaction equipment as its dealer has chosen Yituo; XCMG cannot use Gaya Makmur, as it is
a Wirtgen Group dealer, which also blocks Shantui.
With a total of 70 kilometres of new highways built in the last five years, it is clear that a large
number of machines have become unusable in recent years, due to the lack of regular work, and
many of those machines will never return to service. In consequence, the number of active
machines has reduced from the mid-1990s level of 7,000 machines to 3,000.
Forecast
Table 112. Indonesia: Forecast Sales of Compaction Equipment by Type, 2012-2016
2012 2013 2014 2015 2016

Tandem 150 16 200 18 200 18 170 17 150 16
Self-Propelled 800 83 900 81 900 80 800 82 800 83
Pneumatic-Tyred Rollers (PTR) 10 1 15 1 20 2 5 1 5 1
Total 960 100 1,115 100 1,120 100 975 100 955 100
President Yudhoyono pledged to double spending on roads, seaports and airports to $140 billion
from 2010 to 2015, and the forecast shown above assumes that new road construction will once
again return. The priority is on the trans-Java road, aiming to complete all the missing sections
(three quarters of the total) by 2014. The toll road operator, Jasa Marga should be busy on the
construction of eight new routes of about 500 kilometres during the next five years.
The forecast therefore shows increases in the sale of asphalting machines, with a return of the 8
to 10 tonne tandem for new road construction. The soil roller market will stay at a high level, as
the oil palm industry continues its expansion, alongside the forestry sites and the open cast
mines. Compaction equipment used on basic unmade roads found commonly in country areas
will continue to need vibratory equipment as typified by the self-propelled or single drum roller.
130
Machines Available
Table 113. Indonesia: Ride-on Compaction Equipment Available, 2012
Operating
Type/ Weight Engine Product
Manufacturer Model (Tonnes) HP Manufacturer Source
Tandem
Ammann AV12-2 1.5 18 Yanmar Switzerland
AV16-2 1.6 18 Yanmar Switzerland
AV70 X 7.2 80 Cummins Czech Republic
AV70 X4 7.5 80 Cummins Czech Republic
AV80 X4 7.6 80 Cummins Czech Republic
AV85-2 8.6 84 Cummins Czech Republic
Bomag BW151AD-2 6.8 81 Deutz Germany
Caterpillar CB14 1.6 22 Caterpillar France

CB14XW 1.8 22 Caterpillar France
CB22 2.5 34 Caterpillar France
CB34XW 4.2 46 Caterpillar France
CB434D/XW 7.4 83 Caterpillar USA
CB534D 9.7 130 Caterpillar France
CB534D XW 11.7 130 Caterpillar France
CB564D 12.6 130 Caterpillar France
Dynapac CC800 1.6 23 Perkins Sweden

CC900 1.6 23 Perkins Sweden
CC1000 1.7 23 Perkins Sweden
CC900S 1.6 23 Perkins Sweden
CC102 2.3 28 Deutz Sweden
CG223HF 7.5 84 Deutz Sweden
CC224HF 7.7 80 Cummins Sweden
(continued)
131
Table 113. Indonesia: Ride-on Compaction Equipment Available, 2012 (continued)
Operating
Dynapac CG233HF 8.2 83 Deutz Sweden
(continued) CG333HF 8.6 88 Deutz Sweden
CC722 17.0 214 Cummins Sweden
Hamm HD10 VV 2.3 30 Hatz Germany

HD70 7.3 86 Deutz Germany
LiuGong CLG 613 12.9 124 Cummins China
Sakai SW250 1.6 12 Kubota Japan

SW352 2.9 27 Kubota Japan
SW500 4.0 40 Isuzu Japan
SW652 7.1 78 Hino Japan
Volvo DD-38HF 3.8 42 Kubota USA

DD-70 6.7 80 Cummins USA
Xiagong XG6031D 3.0 34 Shanghai Diesel China

XG6032D 3.1 38 Cummins China
Self-Propelled
Ammann ASC70 7.1 101 Cummins Czech Republic
ASC90 8.9 101 Cummins Czech Republic
Bomag BW177D-3 7.4 76 Cummins Germany

BW211D-3 11.0 131 Deutz China
BW216D-3 16.1 153 Deutz Germany
Caterpillar CS423E 7.0 83 Caterpillar France

CS433E 7.0 101 Caterpillar France
CP433E 7.4 101 Caterpillar France
CS533E 10.8 130 Caterpillar France
CP533E 11.5 130 Caterpillar France
CP54 12.4 132 Caterpillar France
(continued)
132
Operating
Caterpillar CS54/CS54 XT 12.4 130 Caterpillar France
(continued) CP56 12.5 158 Caterpillar France
CS56 12.6 158 Caterpillar France
CS76/CS76 XT 18.9 177 Caterpillar France
Dynapac CA134 4.5 84 Deere Sweden

CA144 4.8 84 Deere Sweden
CA152D 6.6 95 Cummins Sweden
CA250 11.3 102 Cummins India
CA610D 20.6 173 Cummins China
Hamm 3410 10.5 129 Deutz Germany

3520 19.8 201 Deutz Germany
JCB VM115 10.9 114 JCB India
LiuGong 612H 12.3 145 Cummins China

614/H 14.0 127/145 Cummins China
616 16.0 150 Cummins China
Sakai SV201 4.4 60 Cummins Japan

SV400 7.4 82 Isuzu Japan
SV512D/T/TF 10.5 123 Perkins, Isuzu Indonesia
SV900 19.0 165 Isuzu Japan
(continued)
133
Operating
Volvo SD100D 10.4 125 Cummins China
SD110 11.1 133 Volvo USA
SD200DX 20.4 208 Cummins China
Xiagong XG6071D 7.0 101 Cummins China

XG6121/6141 12.1/14.0 150 Cummins China
XG6122H 12.1 130 Cummins China
XG6181/XG6201 18.0/20.0 188 Shanghai Diesel China
XG6142M/6162M/ 14.0/16.0/ 147 Yuchai China
6184M 18.0
XG6203M 20.0 168 Shanghai Diesel China
XG6204M 20.0 168 Yuchai China
XG6224M 22.0 182 Shanghai Diesel China
XG6261 25.5 217 Weichai China
Pneumatic-Tyred Rollers
Ammann AP 240/240 H 9.9/9.4 99 Cummins Czech Republic
Bomag BW24R 10.0 95 Cummins Germany
Caterpillar PS300C 14.0 100 Caterpillar France
Dynapac CP142 6.0 99 Cummins Sweden

CP224 9.5 99 Cummins Brazil
CP271 10.8 99 Cummins Brazil
Hamm GRW10 9.2 116 Deutz Germany

GRW15 11.7 116 Deutz Germany
LiuGong CLG626 26.0 176 Dongfeng Cummins China
Sakai TS160 3.0 18 Isuzu Japan

TZ701 15.0 94 Hino Japan
TS200 15.0 92 Isuzu Japan
Xiagong XG6201P 20.0 123 Yuchai China

XG6261P 26.0 141 Cummins China
134
ASPHALT FINISHERS
Since 2001 there has been a measure of demand for medium and narrow width asphalt finishers,
but most of the demand has been met by second-hand equipment, mainly from Japan, but also
some reconditioned units from Europe which are not included in the above sales figures. Very
little road building has taken place in the last five years; so all the machines sold have been
devoted to repair work.
Table 114. Indonesia: Sales of Asphalt Finishers, 2007-2011

(Units)
2007 2008 2009 2010 2011

5 2 2 6 11
Unfortunately there is a notable lack of money for the repair of existing roads. Although there
are sums available for repairs, the money never seems to get to the contractor. Indeed, road
repair, or the lack of it, is a prime example of Indonesia’s major problem of corruption.
Some funds are getting through to maintain roads, mainly in the capital Jakarta and other
regional centres. The funds, however, are not guaranteed from year to year and one small
symptom is the irregular and entirely unpredictable sale of new asphalt finishers. 2011 was a
relatively good year, with five small wheeled asphalt finishers sold for repair work.
Production
There is no domestic production of asphalt finishers.
Market Shares
Looking back over the last five years one can see that the lesser known Japanese manufacturer
Hanta has sold the same number of units as Caterpillar. Hanta has for 40 years specialised in
very small pavers, although it now makes medium-sized machines as well. The importer,
Equipindo, has a range of other relevant products, including Sakai compaction equipment and
Mitsubishi motor graders. Caterpillar vies for the leading position in asphalt pavers with its US
135
and Italian (formerly Bitelli) asphalt finishers with sales estimated at nine units between 2007
and 2011.
Table 115. Indonesia: Suppliers of Asphalt Finishers and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Hanta 3 60 1 50 - - - - 5 46
Caterpillar - - - - 1 50 4 67 4 36
Vögele 2 40 1 50 1 50 2 33 2 18
Total 5 100 2 100 2 100 6 100 11 100
Behind them comes the German manufacturer Vögele, which since 2007 has been selling via
Gaya Makmur Tractors. It also sells the Hamm rollers belonging to the same Wirtgen Group,
having exceeded 100 sales since the launch in 2007; and cold planers but only one or two units
each year.
Table 116. Indonesia: Distribution Networks of Suppliers of Asphalt Finishers, 2012
Dynapac Probesco
Hanta Equipindo
Vögele Gaya Makmur Tractors
Volvo Indotruck Utama
Altrak 1978 no longer sells the Dynapac lines and it may be a little time before the new dealer,
Probesco launches the asphalt finishers officially. Intraco Penta, one of the Volvo dealers has
not launched the asphalt finishers but Indotruck may do so in late 2012.
The total population of asphalt finishers is estimated at 170 units, marginally more than in the
mid-1990s. Many of these machines are not working at present, due to the lack of funds for
government projects and only time will tell how many of them are in sufficiently good condition
to be used again. Government departments and provincial road authorities are the main end-
136
users. Increasingly, small private contractors are taking on the work previously carried out by
local authorities.
Forecast
President Yudhoyono has pledged to double spending on roads, seaports and airports to
$140 billion, and the forecast shown above assumes that new road construction will once again
return. The priority is on the trans-Java road, aiming to complete all the missing sections (three
quarters of the total) by 2014. The toll road operator, Jasa Marga should be busy on the
construction of eight new routes of about 500 kilometres during the next five years. One part of
the toll road has already begun work, the 116 kilometres linking Cikampek and Palimanan in
West Java province, in the hands of a joint venture called LMS. In consequence the forecast
predicts a return to the sales level seen in the early 1990s when road construction did happen.
Table 117. Indonesia: Forecast Sales of Asphalt Finishers, 2010-2014

(Units)
2012 2013 2014 2015 2016

15 20 20 10 10
Machines Available
Table 118. Indonesia: Asphalt Finishers Available, 2012
Paving
Width Engine Product
Manufacturer Model Type (Metres) HP Manufacturer Source
Caterpillar AP-300 W 0.7-4.0 71 Caterpillar Italy
BB740 W 1.0-5.6 84 Caterpillar Italy
BB650 W 2.5-6.0 94 Deutz Italy
BB670 W 2.5-7.5 121 Caterpillar Italy
AP600D W 2.5-6.2 176 Caterpillar Italy
AP800D W 2.5-6.2 130 Caterpillar USA
BB621C C 0.5-3.0 35 Hatz Italy
BB651C C 2.5-6.0 94 Caterpillar Italy
BB655D C 2.5-6.2 176 Caterpillar Italy
AP755 C 2.5-7.8 202 Caterpillar Italy
AP1055D C 3.1-7.3 224 Caterpillar USA
Dynapac F6W W 2.0-5.0 67 Deutz Germany

F121W W 2.5-7.3 161 Deutz Germany
(continued)
137
Table 118. Indonesia: Asphalt Finishers Available, 2012 (continued)
Paving
Dynapac F141W W 2.5-7.3 188 Deutz Germany
(continued) F161W W 2.5-7.3 205 Deutz Germany
F5C C 1.2-3.1 42 Deutz Germany
F6C C 1.7-4.4 70 Deutz Germany
F121C C 2.5-7.3 155 Cummins Germany
F182CS C 2.5-13.5 232 Deutz Germany
Hanta BP25W3 W 1.4-2.5 34 Kubota Japan

BP40W3 W 2.3-4.0 66 Kubota Japan
F1430W3 W 1.4-3.0 35 Kubota Japan
BP31W3 W 1.7-3.1 51 Kubota Japan
F45WJ3 W 2.4-4.5 67 Kubota Japan
F14C3 C 0.8-1.4 24 Kubota Japan
BP25C3 C 1.4-2.5 36 Kubota Japan
BP31C5B C 1.7-3.1 51 Kubota Japan
BP40CB C 2.3-4.0 51 Kubota Japan
F1740C2B C 1.8-4.0 51 Kubota Japan
F45CJ3 C 2.4-4.5 67 Kubota Japan
LiuGong CLG507 C 2.5-7.5 181 Shanghai China

CLG509 C 2.5-9.5 178 Deutz China
CLG512 C 2.5-12.5 216 Deutz China
Vögele Super 1603-2 W 2.5-7.0 135 Perkins Germany

Super 800 C 2.0-3.2 61 Deutz Germany
Super 1100-2 C 1.8-4.2 78 Deutz Germany
Super 1300-2 C 1.8-4.5 101 Deutz Germany
Super 1600-2 C 2.5-8.0 148 Perkins Germany
Super 1800-2 C 2.5-10.0 195 Perkins Germany
Volvo ABG4361 W 2.5-5.5 102 Cummins Germany

ABG5770 W 2.5-7.5 166 Deutz Germany
ABG2820 C 2.5-4.0 85 Deutz Germany
ABG7820B C 2.5-10.0 231 Deutz Germany
(continued)
138
Table 118. Indonesia: Asphalt Finishers Available, 2012 (continued)
Paving
Volvo ABG8620 C 2.5-13.0 231 Deutz Germany
(continued) ABG8820B C 2.5-13.0 231 Deutz Germany
MOBILE COMPRESSORS
Since 2001 unit sales of mobile compressors have not returned to the heights of the 1990s and
peaked at 300 units in 2004. They are now around 280 units each year.
Table 119. Indonesia: Sales of Mobile Compressors by Output Category, 2007-2011
2007 2008 2009 2010 2011

Output (m³/Min) Units % Units % Units % Units % Units %
3.1-4.0 170 64 170 61 162 57 175 56 175 56
4.1-6.0 60 23 70 25 80 28 75 25 70 22
6.1-9.0 5 2 10 4 10 4 5 2 - -
9.1-13.0 20 8 20 7 20 7 35 11 48 15
Over 13 10 4 10 4 10 4 15 5 22 7
Total 265 100 280 100 282 100 305 100 315 100
Several factors constrain demand. Low-cost labour means that contractors would rather use men
with hammers and chisels than pneumatic drills or breakers. Indonesia has yet to become a
modern user of mobile compressors. Much digging of trenches is still done by hand, with city
work showing little evidence of the familiar compressor and pick combination evident elsewhere.
Where machines are used, the hydraulic excavator with a breaker attachment is the preferred
alternative for most contractors.
Mobile compressors are mainly used in demolition in industrialised countries, but this work
hardly exists in Indonesia, where almost all construction is on green land, or in areas where no
serious demolition of older buildings need take place. There are some applications for mobile
139
compressors in the construction industry, but their uses are few and they are seldom seen on
building sites. Sales to construction were quite low from 2007 to 2009.
The main end-users are in the mines, quarries and ports. Probably the largest market at present is
for mobile compressors, mounted on skids and located on lorries, so called ‘Service Trucks’
which are used on mining sites for air blasting of working equipment such as excavators, dump
trucks and on-off road 10-wheel trucks. These trucks contain other tools and reservoirs of fresh
oil and grease for on-site maintenance. Service Trucks, mounted on conventional truck chassis
are produced locally.
In the overall distribution of sales the most popular is in the size range 3.1-4.0 m³/min. This size
is used by contractors in construction and the mines and in the small rental market. Sand blasting
specialists would prefer higher outputs, such as 11.0 m³/min. The larger sizes, 8.0 to 25 m³/min,
are used mainly in the oil and gas industry (which uses higher pressure types, 10 to 12 bar), in
large quarries and also in some mines. Exploration uses mobile compressors but in general
exploitation of mining sites the hydraulic drill is now dominant.
Production
There is no domestic production of mobile compressors.
Market Shares
Table 120. Indonesia: Suppliers of Mobile Compressors

and Their Market Shares, 2007-2011
2007 2008 2009 2010 2011

Atlas Copco 87 33 90 32 77 27 120 39 125 40
Airman 150 57 150 54 110 39 85 28 90 29
Elgi - - - - - - 30 10 40 13
Ingersoll Rand 19 7 23 8 49 17 30 10 20 6
Chicago Pneumatic - - - - 22 8 20 7 20 6
Kaeser 5 2 12 4 12 4 10 3 10 3
Sullair 2 1 3 1 7 2 5 2 5 2
CompAir 2 1 2 1 5 2 5 2 5 2
Total 265 100 280 100 282 100 305 100 315 100
140
After the crisis of 1997, many suppliers of mobile compressors disappeared from the market,
unable or unwilling to sustain representation through the difficult years of the late 1990s and
2000. The result is a smaller market with only three real contenders.
Atlas Copco has improved its position as second placed supplier and there is no doubt that part
of the company’s success is due to taking control of distribution by establishing PT Atlas Copco
Indonesia. Its largest market is mining, which accounts for about 30 per cent of current sales. In
second position is oil and gas at 25 per cent. Of emerging importance is manufacturing industry,
in third place representing 20 per cent. The construction market is one of the smallest end-users,
representing only 10 per cent. Government agencies and department account for a further 10 per
cent.
The Japanese manufacturer Hokuetsu with its Airman brand was by far the most successful
supplier from 2005 to 2009. It was price competitive and strong on customer service and could
hold the competitive edge over its mainly European rivals. Unfortunately the rising value of the
Yen took away the price advantage and it has slipped to second place. Fajar Mas Murni has been
the Airman agent since 2003 and, although it has a construction and mining division where the
mobile compressors are managed, it does not have an extensive commitment to construction any
longer. It does, however, have a full range of quarry and mining equipment, led by its Furukawa
drills. Most of its sales of mobile compressors are on wheels rather than skids and its models
PDS130 and PDS185 are the market leaders.
Elgi of India has been a surprise success in the market, since its launch by Probesco in 2008. It
is the country’s largest manufacturer of portables but exports relatively small numbers of mobile
compressors. It does, however, have a full range of products, coming from a country with low
labour costs.
Ingersoll Rand has been less successful in selling smaller compressors under 4.0 m³/min since it
changed distributor from Fajar Mas Murni to Intraco Penta. It is strong in the oil and gas
platform market with larger compressors over 10.0 m³/min. The dealer has an established
position as a supplier to coal mining contractors in Kalimantan and other sectors, in particular
nickel, gold and tin mines.
The Sakai compaction equipment dealer Equipindo founded a small subsidiary to sell Chicago
Pneumatic mobile compressors, a brand that has been absent from the market for many years. It
selling about 20 units per annum, a good result for a small player. The Kaeser franchise has
141
been placed in a specially named subsidiary of the Kawan Lama Group but it is the same
operation as before.
Table 121. Indonesia: Distribution Networks of Suppliers of Mobile Compressors, 2010
Airman Fajar Mas Murni
Atlas Copco Atlas Copco Indonesia
Chicago Pneumatic Sacon
Elgi Probesco
Ingersoll Rand Intraco Penta
Kaeser Indokompresigma
Sullair Trakindo Utama
The total number of mobile compressors has not changed since the last report at 2,500 machines.
This is similar to the number recorded in the mid-1990s. Airman, Atlas Copco and
Ingersoll-Rand represent about 80 per cent of the total, and nearly 90 per cent of mobile
compressors in the 3.1-4.0 m³/min category.
Table 122. Indonesia: Major End-Users of Mobile Compressors,

by Output Capacity, 2012
Output Capacity
(M³/Min) End-User Applications
Up to 6 Road construction and improvement work; private contractors and public works departments
6-20 Large construction projects, mining, quarries, water well drilling, sand blasting
Over 20 Large scale infrastructure, oil and gas exploration
Second-hand machines from Japan, Singapore and Australia tend to be operating in the small
rental market and their poor condition gives rental a bad name. Suppliers say it is difficult or
impossible to sell new units to rental companies.
One of the key reasons why the mobile air compressor market has been slow to develop since
2000 is the lack of investment in roads. This was the main application in the mid-1990s, when
there was considerable government investment in new roads. Now the main application is in the
mines, for rock drilling and on service trucks.
142
Forecast
Table 123. Indonesia: Forecast Sales of Mobile Compressors, 2012-2016

(Units)
2012 2013 2014 2015 2016

320 350 350 350 300
In the short term sales are going very well. The economic background is favourable and both the
mining and construction industries are willing to invest. The market could grow by 10 to 20 per
cent. Over the following four years the best hope is mining. Construction of major
infrastructures should progress as there is a major need for them but they continue to be dogged
by the slowness of resolution of land ownership problems and the difficulty of securing viable
finance. The most popular size will remain between 3.1 and 6.0 m³/min.
Machines Available
Table 124. Indonesia: Mobile Compressors Available, 2012
Air Delivery Engine Weight Product

Manufacturer Model (M³/Min) HP Manufacturer (Kg) Source
Airman PDS130S 3.5 38 Shibaura 880 Japan
PDS185S 5.0 52 Nissan 915 Japan
PDS265S 7.5 83 Yanmar 1,480 Japan
PDS390S 11.0 110 Isuzu 2,240 Japan
PDS655S 18.5 160 Hino 3,550 Japan
PDS750S 21.2 196 Hino 3,675 Japan
Note: A wide range of high pressure models from PDSE900 (8.8 bar) to PDSK900S (25.5 bar) is also available.
Box types are available from 1.5 to 11.0 m3/min.
Atlas Copco XAS37 2.5 21 Kubota 450 Belgium
XAS47 2.6 26/29 Kubota/Deutz 635 Belgium
XAS57 3.0 31 Deutz 685 Belgium
XAS67 3.7 44 Deutz 800/850 China
XAS186 11.1 114 Deutz 1,800 Belgium
XAS426 25.0 222 Mercedes 2,300 Belgium
Note: All the above have a working pressure of 7 bar. A range of high-pressure models is also available.
Chicago Pneumatic CPS70 2.0 25 Kubota 552 China
CPS90 2.5 26 Kubota 556 China
CPS110 3.0 32 Deutz 730 China
(continued)
143
Table 124. Indonesia: Mobile Compressors Available, 2012 (continued)

Chicago Pneumatic CPS185 5.3 49 Deutz 960 China
(continued) CPS275 7.9 82 Cummins 1,500 China
CPS400 11.8 129 Cummins 1,680 China
CompAir C20 2.0 21 Perkins 542 Germany

C25 2.5 28 Deutz 694 Germany
C30 3.0 30 Deutz 835 Germany
C35-10 3.5 48 Cummins 808/875 Germany
C38 3.8 48 Cummins 1,100 Germany
All the above have a working pressure of 7 bar. A range of high-pressure models is also available.
Elgi DT 175-100 5.0 52 Deutz 1,480 India
Ingersoll Rand 7/21 2.0 22 Ingersoll-Rand 650 Czech Republic

7/31E 3.0 34 Ingersoll-Rand 800 Czech Republic
7/41 4.0 46 Ingersoll-Rand 805 Czech Republic
7/51 5.0 61 Ingersoll-Rand 900 Czech Republic
7/71 7.1 80 Ingersoll-Rand 1,120 Czech Republic
7/120 12.0 125 Ingersoll-Rand 1,800 Czech Republic
Note: A range of higher-pressure models at 10 to 12 bar is available in various sizes from 5.6m3/min to 42.5 m3/min.
Kaeser M13 1.0 18 Honda 190 Germany
M20 2.0 19 Kubota 457 France
M26 2.6 24 Kubota 498 Germany
M52 5.2 46 Kubota 1,225 Germany
M122 11.1 111 Deutz 1,865 Germany
M123 11.4 118 Deutz 1,945 Germany
M270 27.0 348 Mercedes 5,025 Germany
Note: A range of higher-pressure models at pressures from 8 to 14 bar is available in various sizes from 4.15m3/min
to 25.5m3/min.
Sullair 125 3.5 59 Caterpillar 1,990 USA
130 3.7 60 Caterpillar 1,990 USA
(continued)
144
Table 124. Indonesia: Mobile Compressors Available, 2012 (continued)

Sullair 825 23.4 275 Caterpillar 10,100 USA
(continued) 900 25.5 275 Caterpillar 10,100 USA
1050 29.7 300 Caterpillar 10,100 USA
1600 45.3 450 Caterpillar 16,260 USA
1900 53.8 525 Caterpillar 16,350 USA
Note: A range of higher-pressure models at 10, 12 and 24 bar is available, with outputs from 5.3 to
45.3 m3/min.
AGRICULTURAL TRACTORS
The main end-users of agricultural tractors bought new are not individual farmers, but plantations
and estates. Oil palm plantations and sugar estates are among the largest customers. Tractors are
also used in logging, on plantations for paper mills and in industry.
Table 125. Indonesia: Sales of Agricultural Tractors by Horsepower, 2007-2011
2007 2008 2009 2010 2011

20-40 220 17 255 16 210 16 200 10 220 10
50-79 170 13 160 10 100 8 170 9 180 8
80-99 770 59 985 62 820 63 1,375 72 1,582 73
Over 100 140 11 190 12 170 13 180 9 200 9
Total 1,300 100 1,590 100 1,300 100 1,925 100 2,182 100
Since 2002, the marketing emphasis has been on oil palm plantations. Tractors are essential
during the harvesting and gathering of the fruit, where they are transported on trailers through the
lines of palm trees. The typical ensemble is a simple agricultural tractor of 80 horsepower and a
2 to 3 tonne single axle trailer. The fruit is then transferred into larger trailers, drawn by trucks
to the processing plant. Some use 150 horsepower tractors and even larger trailers for this
second stage in collection and transportation. There are a few sales of large articulated four
wheel drive tractors, where some of the sugar estates have expressed interest because of the
potential for higher productivity from towing larger trailers.
145
Agriculture that grows food uses very few four wheeled tractors because of the small size of the
average farm, which varies from two-thirds to three hectares. Small tiller steered single axle
tractors with single cylinder diesel engines under 10 horsepower are commonly employed, and
the annual demand for these is estimated at 15,000 units. They are often called ‘hand tractors’.
The importing of agricultural tractors grew strongly in the mid-1990s, reaching more than
1,000 units in 1995. However, like other types of equipment, the market collapsed in the second
half of 1997, only to recover from fewer than 100 units in 2000 to 360 units in 2002 and 2003.
Since that time the increase in sales has been steady. Apart from a more conducive economic
climate, Indonesia has experienced rising agricultural prices, especially palm oil prices. Between
2005 and 2008 palm oil prices rose from $350 to $1,250 per tonne but then the price slumped to
$440 by year end. It recovered only in Q3 of 2010 and was at $1,100 by the end of the year.
Since early 2011 the price has been around $1,100.
Today the oil palm plantations account for 75 per cent of all new tractor sales, up from 60 per
cent two years ago. The sugar estates have not expanded in the same way and their share has
declined from 25 to 15 per cent. The rest goes to forestry, logging and other areas of agriculture.
Currently, the market is buoyant for the seventh year running, thanks to the need of transport on
the plantations. The most popular size of tractor, accounting for 70 to 75 per cent of demand, is
in the 80-99 horsepower range. However, there is a trend to larger tractors over 100 horsepower,
which will become stronger in years to come. This is the favoured size for sugar cane transport,
as the plantations have deeply rutted ground.
The market for small tractors under 40 horsepower is beginning to develop, particularly from
Kubota, which specialises in small tractors. Sales of tractors under 40 horsepower have grown
from zero in 2002-2003 to around 250 units per year since 2006. There is a limit to their
potential success, however, since they are not liked because of their compaction of the soil.
Secondly, the single axle tractor fits better into paddy rice cultivation, which covers about
11 million hectares of the country.
Production
There is no domestic production of agricultural tractors.
146
Market Shares
Positions in the tractor market change quite regularly. Within the last five years John Deere,
Massey Ferguson and New Holland have all been market leaders at one time.
Table 126. Indonesia: Suppliers of Agricultural Tractors and

2007 2008 2009 2010 2011

New Holland 390 30 450 28 120 9 590 31 680 31
John Deere 320 25 400 25 380 29 525 27 608 28
Massey Ferguson 260 20 300 19 345 27 392 20 423 19
Kubota 225 17 240 15 230 18 193 10 221 10
LS - - 60 4 60 5 50 3 100 5
Others* 105 8 140 9 165 12 175 9 150 7
Total 1,300 100 1,590 100 1,300 100 1,925 100 2,182 100
* Mahindra, Foton, Yanmar, YTO, Dongfeng and others

New Holland was market leader in 2011 with a 31 per cent market share; in 2007 it won 30 per
cent and in 2008 28 per cent. The importer, Altrak 1978, however, had severe doubts about the
market in 2009 and did not order tractors from its supplying plants in Brazil, India and Turkey.
Demand from the oil palm plantations was higher than expected, so New Holland lost share
massively. New Holland is now back on top. The best-selling tractor is the 90 horsepower TS90
from Brazil, but lately sales of the 120 horsepower TS120 model have increased and now
account for about 20 per cent of sales.
John Deere was the leading supplier of tractors in 2009, as it was during the mid-1990s but is
now in third position. The best-selling models accounting for 65 per cent of sales are the
Mexican-built 5715 at 75 horsepower. Besides its agricultural tractors, which currently come
from India, Mexico, China and USA, the importer Satrindo Utama sells a wide range of
implements, most of them made in Brazil and adapted to the needs of tropical agriculture
systems. Interestingly, an experiment to import a small Chinese 35 horsepower model from John
Deere Ningbo was not a success, as the product seemed not well adapted to local market needs,
Massey Ferguson was the market leader in 2005-2006, then fell to fourth place but recovered by
2009 to win second position. Since then it has returned to the 20 per cent share it had before and
is in third place. It benefits from an experienced importer/distributor, Traktor Nusantara, with a
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comprehensive distribution network throughout the country. The best-selling tractor is the
82 horsepower model 440 Extra, produced in Brazil. For the expansion of the sugar cane
industry, the company is confident it will have a strong offering in the Brazilian 600 series, 150
to 170 horsepower and hailing from a country with many tropical products similar to those of
Indonesia.
Kubota is in a separate market area, targeting small tractors under 40 horsepower and a little of
the 90 horsepower market. It has some rivals in the small tractors, Yanmar and some
Massey Ferguson tractors made by Iseki in Japan but is far ahead of them.
Table 127. Indonesia: Distribution Networks of Suppliers of Agricultural Tractors, 2012
Foton Gaya Makmur Tractors
John Deere Satrindo Mitra Utama
Kubota Bina Pertiwi
LS Probesco
Mahindra Intraco Penta
Massey Ferguson Traktor Nusantara
New Holland Altrak 1978
Yanmar Yamindo
The tractor market is dominated by simple transport tractors of 80 to 90 horsepower, and is being
fuelled by the palm oil industry, which is a matter of corporations, not individuals. These factors
have attracted into the market players with no special commitment to agriculture, reckoning that
they can offer adequate service of fairly simple machines. Hence the appearance of LS from
Korea with Probesco, Mahindra of India with Intraco Penta and the Chinese leader YTO with
Indotruck. The leading three suppliers all believed in 2007 that Chinese tractors would become
much more significant in the next few years but those that actually sold them have found the
experience very disappointing. The most frequent complaint is poor support from the
manufacturer. Several importers have brought in Chinese tractors from time to time, but they
tend to be sold entirely on price with little or no service back-up and spare parts are generally not
available. They have quickly failed in what is an unusual farm machinery market, populated by
big corporations with high expectations in support systems.
In June 2012 Kubota announced that it would set up its own sales company in the country,
presumably implying the end of relations with Bina Pertiwi, the United Tractors subsidiary.
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Population
The number of working four wheel tractors in service is estimated at 13,000 units in 2012. The
population level is more or less static and there is no sign of any special push to mechanise small
farms, such as one can see in Thailand with its subsidised locally made Kubota mini-tractor.
Forecast
Table 128. Indonesia: Forecast Sales of Agricultural Tractors, 2012-2016
2012 2013 2014 2015 2016

2,200 2,500 2,800 3,000 3,500
Sales of agricultural tractors have been growing since 2004, with a halt for only one year, in
2009. The industry is withstanding the problems of the worldwide recession well. The two
reasons are the wishes of the corporations to expand palm oil estates and the desire of the
government to double sugar production. The palm oil industry is not just local; investors are
coming from the USA, Australia and even the Middle East to participate. The sugar industry is a
slightly different case. The shortage of sugar is caused partly by the government maintaining a
monopoly while running about 50 dilapidated sugar mills of its own. Farming more land with
cane will help but so will putting more modern machinery into the mills. For the farmers a rise
in the sugar price recently means that they can see irrigating land for cane as more profitable
vis-à-vis other uses.
The forecast for sales of agricultural tractors reflects the favourable outlook for plantation
products. The palm oil harvest will grow hugely in the next few years. The trees take three or
four years to start producing and there is almost as much land with young palms on it as the area
with mature trees. Secondly, large areas of cleared land have not yet been planted, so the
moratorium on clearing new land will have little effect (even if it is imposed successfully).
There will be a huge need for harvesting machinery and so far the model is still manual labour
followed by the tractor and trailer taking the palm to a fixed crusher.
Farming for food will still be a very small part of the demand. Very few farmers can afford
tractors, and such is the outlook for many years to come. The ubiquitous tiller operated single
cylinder diesel tractor looks likely to dominate for some time.
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Machines Available
Table 129. Indonesia. Agricultural Tractors Available, 2012
Engine Product
John Deere 5038D 38 Deere India
5310 56 Deere India
5610 74 Deere India
5715 75 Deere Mexico
6100B 100 Deere China
6110B 110 Deere China
6155 155 Deere Mexico
8345 270 Deere USA
8420 296 Deere USA
Foton Europard 454 45 Fujian Lijia China

Europard 824 82 Perkins China
Kubota L2800 29 Kubota Japan

L3400 35 Kubota Japan
MX5100 52 Kubota Japan
M9000 89 Kubota Japan
M9540 99 Kubota Japan
M105S 110 Kubota Japan
LS S28 28 Daedong Korea

R28 26 Mitsubishi Korea
N41 41 Mitsubishi Korea
Plus 70 72 FPT Korea
Mahindra 8000 80 Mahindra India
Massey Ferguson MF1533 32 Iseki Japan

MF1547 46 Iseki Japan
MF415 46 Perkins Brazil
MF2405/2415 47 Mitsubishi Poland
(continued)
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Table 129. Indonesia. Agricultural Tractors Available, 2012 (continued)
Engine Product
New Holland TT55 55 New Holland India
TT75 75 New Holland India
TL80 80 New Holland China
TD80D Plus 80 New Holland Turkey
TS90 90 New Holland Brazil
TS120 120 New Holland Brazil
T9030 385 New Holland USA
Yanmar EF453T 45 Yanmar Japan
MANUFACTURER PROFILES
In 2012 there are five manufacturers producing construction equipment profiled in this report:
 PT Caterpillar Indonesia
 PT Hitachi Construction Machinery Indonesia
 PT Komatsu Indonesia
 PT Sakai Indonesia
 PT Sumitomo S.H.I. Construction Machinery Indonesia
Their current product lines are summarised in the table below.
Table 130. Indonesia: Ranges of Construction Equipment Produced

By Manufacturer, 2012
Rigid
Crawler Crawler Dump Compaction
Manufacturer Excavators Dozers Trucks Equipment
Caterpillar  - - -
Hitachi  - - -
Komatsu    -
Sakai - - - 
Sumitomo  - - -
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In addition to the five named above, Sany of China has promised to set up a massive plant in the
country; and BEML of India has promised that when it reaches the level of having sold 100 units
it will set up an assembly plant for mining machinery.
Domestic manufacturing is significant, and as a percentage of the total market, has risen from
39 per cent in 2006 to 43 per cent in 2011.
Looked at from a wider perspective, the emergence of Chinese producers has long-term
implications for manufacturing in Indonesia. All five local manufacturers have manufacturing
interests in China. Worldwide competition and pressure on prices have encouraged Komatsu,
Caterpillar and Hitachi, in particular, to re-examine their cost base and favour production in their
Chinese factories; Sumitomo is there to catch up on them and will sell production only within the
ASEAN region.
There are also the effects of manufacturing in other ASEAN countries. Komatsu and Kobelco
have developed factories in Thailand, taking advantage of a modern infrastructure built for the
motor industry, which has implications in the longer term for the manufacture of 20 tonne
excavators in Indonesia. The former has just expanded its capacity from 3,000 to 12,000 units of
Komatsu excavators; Kobelco has moved to a second site and changed to being a full local
manufacturer from an assembler of kits. Its production has grown by five times since 2008, to
nearly 5,000 units.
One characteristic of construction equipment in the country is about to change. Internationally

known as the ‘home of Tier Zero’, Indonesia is about to move its manufactured construction
equipment to Tier 2 standards. In 2012 the truck industry was obliged to install Tier 4 engines
and in mid-summer the construction equipment industry was warned that a regulation would be
published in August 2012 imposing Tier 2. According to industry sources, hydraulic excavators
will have to be compliant by the end of 2013. Compaction equipment will comply by end 2014
but crawler dozers have been given to end 2016, in view of the need to redesign the products.
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PT CATERPILLAR INDONESIA
Address: PT Caterpillar Indonesia

Jalan Raya Narogong Km19
Cileungsi
Bogor 16820
Tel: +6221 (0)21 823 9806

Web: www.cat.com
History: In 1982 Caterpillar and its local dealer Trakindo formed a joint venture called
Natra Raya to produce machinery for the Indonesian market. Caterpillar Inc. held 80 per cent of
the shares of PT Natra Raya and PT Trakindo Utama 20 per cent. Natra Raya began production
in 1984 and went on to produce a wide range of construction equipment including crawler
dozers, wheeled loaders and motor graders. In 1987 hydraulic excavators were added to the list
of locally produced machines, and generating sets were also assembled locally.
At the end of 2009, Caterpillar took over 100 per cent of the company’s equity and changed its
name to PT Caterpillar Indonesia.
Turnover: Natra Raya, as it was, suffered the effects of the worldwide downturn of construction
equipment sales in 2009, with turnover falling to $60 million, 45 per cent less than the figure of
2006. Caterpillar Indonesia managed $120 million in 2010 and around $250 million in 2011. As
the Indonesian operation is a subsidiary of Caterpillar Inc., no official figures are published and
the preceding figures are Off-Highway Research estimates.
Personnel: 500.
Product Range
Table 131. PT Caterpillar Indonesia: Product Range, 2012
Engine Weight
Product Model HP Manufacturer (Tonnes)
Crawler Excavators 320D 185 Caterpillar 19.8
Log Skidders 527 160 Caterpillar 17.2-21.4
The number of product lines has been simplified and much reduced, with many products sold in
the country now coming from China, India and the United States. After the recession of the late
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1990s wheeled loaders and graders were dropped from the range, then late in 2011 and in the
second quarter of 2012 the plant phased out crawler dozers in favour of tracked log skidders.
In the crisis of 2008 the plant suspended production of the model 320 crawler excavators of
20 tonnes, then reinstated it in 2010. In the latter year it undertook pilot production of the log
skidder, and then put it into full production in 2011. It is the unique worldwide source for the
product.
Manufacturing Facilities: The facility at Cileungsi, some 60 kilometres south of Jakarta

occupies an area of 10 hectares of which 15,300 m² are covered. In addition to the main office
building, there are separate buildings devoted to fabrication, assembly and storage, as well as
smaller painting and shipping facilities. The fabrication work is nearly all welding, with little
machining and no robot welding.
Production
Table 132. PT Caterpillar Indonesia: Production of Construction Equipment

by Type, 2007-2011
(Units)
2007 2008 2009 2010 2011

Crawler Excavators 480 770 110 570 1,100
Crawler Dozers 396 630 90 370 500
Log Skidders - - - - 150
Total 876 1,400 200 940 1,750
Total production stayed around 800 units from 2004 to 2007 but had a very successful year in
2008, when it rose to 1,400 units. 2009, on the other hand, was a very poor year, with the
domestic market very weak and some machines being sourced from China, instead of locally.
The 2010 production restored the throughput to the former levels. In 2011 excavator production
nearly doubled and the level in dozers was quite high, even if it was in course of running out. In
December 2011 production of the model D7G ceased; in April 2012 the last D6G left the
assembly line.
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Component Sourcing
Table 133. PT Caterpillar Indonesia: Component Sourcing, 2012
Crawler Excavators Log Skidders

Diesel Engines MHI Japan Caterpillar India
Transmissions Caterpillar Akashi, Japan Caterpillar Sagami, Japan
Hydraulics Caterpillar Jesi, Italy Caterpillar Sagami, Japan
Chassis In-house In-house
Frames In-house In-house
Undercarriages Asia Trak, China Asia Trak, China
Running Gear Asia Trak, China Asia Trak, China
Cabins Press Kogyo Japan Caterpillar, Lagrange USA
Buckets In-house -
Blades - In-house
Caterpillar Indonesia produces much of the structural steelwork including chassis, booms, frames
and covers for engines and radiators. In addition, the company uses more than 20 outside
contractors for components such as seats, air conditioning units, wiring harnesses and different
sizes of buckets.
The hydraulic excavators comprise more than 50 per cent of components sourced from Japan,
including the Caterpillar engines made by MHI. The log skidders have frames and chassis made
in the fabrications shop in the plant. The plant uses first materials provided by local vendors, so
that it does not cut the plate needed but does a large amount of welding.
Distribution and Service: All sales and service are undertaken by the official Caterpillar dealer
in Indonesia, PT Trakindo Utama. This company has a service network of 42 outlets as well as
permanent teams with contractors at the mines. Trakindo Utama also operates a fleet of mobile
service vans.
Export Sales: Almost all the domestic production of excavators is destined for the local market,
although some units have been exported to neighbouring countries such as Malaysia and
Thailand. The log skidders go all over the world in theory, but main target is Malaysia.
Future Developments: In the short term one project is underway. The corporation is building a
plant at Batam to make chassis and bowls for dump trucks, specifically the 785 and 789 sizes.
Batam Island, along with parts of neighbouring Bintan and Karimun, are a part of a Special
Economic Zone with Singapore; this zone eliminates tariffs and value-added taxes for goods
155
shipped between Batam and Singapore. The company is investing about $150 million in the new
facility, which is expected to be operational in 2012 for truck bodies, with the first trucks
produced in the third quarter of 2013.
PT HITACHI CONSTRUCTION MACHINERY INDONESIA
Address: PT Hitachi Construction Machinery Indonesia

Jalan Raya Cibitung KM 48.8
Cibitung Bekasi 17520
Tel: +62 (0)21 8900 515

Web: www.hitachi-cmid.com
Key Personnel: Tadashi Motoi, President Director.
History: PT Hitachi Construction Machinery Indonesia is a joint venture company set up in

May 1991 to manufacture crawler excavators and wheeled loaders, under licence from Hitachi
Construction Machinery Co. Ltd. Japan, and to fabricate steel engineering products for a variety
of plant, heavy equipment and infrastructure projects such as bridges, boilers and pressure
vessels. Production of hydraulic excavators started in 1993 and heavy components, such as
chassis parts for excavators, commenced in 1996.
The ownership of the company, which has a paid up capital of $13 million, is divided between
five companies.
Table 134. Hitachi Construction Machinery Indonesia: Ownership Structure, 2012
%
Hitachi Construction Machinery Co. Ltd 48.1
PT Murinda Iron and Steel 3.2
Itochu Corporation 11.0
Hitachi Construction Machinery Singapore 33.9
PT Anggaputra Dhananjaya 3.8
Total 100.0
Until recently Hitachi Construction Machinery Indonesia maintained two manufacturing

facilities at Bekasi and Cibitung in the west of Java. In April 2012 it sold the Bekasi plant,
which undertakes fabrication, welding and painting, to the Japanese Ohgishi company, which
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specialises in that area of construction equipment in Japan. Ohgishi has been a subcontractor to
Hitachi since 1964 but the Indonesian plant is its first overseas venture.
Turnover in 2012: Approximately $250 million, 25 per cent higher than in 2009.
Personnel: Hitachi CM Indonesia now employs around 1,200. The sale of the Bekasi site
entailed the transfer of approximately 250 people who worked there.
Product Range
Table 135. Hitachi Construction Machinery Indonesia: Product Range, 2012
Engine Weight
Crawler Excavators Zaxis 110M-3 84 Isuzu 10.7
Zaxis 110MF-3 84 Isuzu 11.5
Zaxis 200-3 147 Isuzu 19.4
Zaxis 210MF-3 147 Isuzu 21.0
Zaxis 330-3 271 Isuzu 31.6
Most of the production is of two basic models, at 11 and 20 tonnes. The designation ‘M’ denotes
Mud; ‘MF’ denotes Mud and Forestry, for applications in swampy areas where a long
undercarriage is needed. Since 2010 the company has also been building the larger 32 tonne
Zaxis 330.
Manufacturing Facilities: Hitachi Construction Machinery Indonesia now consists of a single

large manufacturing facility at Cibitung in the west of Java. It has a total surface area of
194,082 m2. The buildings have been extended by 50 per cent since 2010 and cover 86,552 m²,
of which 1,000 m2 are for the offices and canteen. It undertakes fabrication, welding and
painting and is the home of the final assembly line. The company has been expanding the
production capacity; indeed it would have done so earlier, were it not for the world economic
crisis. It has already added a second, third and fourth building, so that the assembly capacity has
risen to 3,300 excavators. This expansion programme cost $38 million.
The expansion of facilities for the production of mining machinery in Japan has encompassed the
Indonesian facilities. The so-called Cibitung plant No 2 has been built on a 100,000 m² site in
West Cikarang, Bekasi and has a covered area of 20,280 m². The two plants together will be
making undercarriages for large and ultra-large excavators, as well as frames and front
157
attachments for the same kinds of machine that it will ship to Japan. Work to build the plant
finished in September 2012, and partial production has begun.
The Bekasi factory now belongs to Ohgishi Co. and undertakes fabrication, welding and painting
for the Cibitung operation. It covers a total area of 50,000 m², of which 11,000 m² is covered.
Production
Table 136. Hitachi Construction Machinery Indonesia: Production of

Crawler Excavators 2007-2011
(Units)
2007 2008 2009 2010 2011

1,741 1,860 1,709 2,150 2,500
In 2006, Hitachi CM Indonesia announced the production of the 5,000th excavator since the
opening of the factory in 1991. Maximum production capacity was increased to 1,800 units by
2009, and exceeded 2,000 units for the first time in 2010.
The 19.4 tonne Zaxis 200 is the mainstay of production and the most popular machine sold by
Hitachi in Indonesia, accounting for 75 per cent of output. Secondly comes the 12 tonne
Zaxis 110MF, accounting for 13 per cent of production.
The second part of the manufacturing concerns export-orientated production of components for
other Hitachi plants, led by those for excavators from 45 to 800 tonnes. At present it makes the
front mounting for the boom as well as the boom itself. The other major part made is the
undercarriage. It made approximately 1,000 side frames for excavators from 45 to 190 tonnes
before the facilities expansion and 120 frames for excavators from 190 to 800 tonnes. The
capacity has been 7,000 tonnes per year.
Thirdly, the company has always made other engineering products. These include:
 Power plant: intake filtration and exhaust systems

 Material handling: cranes, conveyor systems
 Rolling mills: roller changers, cooling conveyors
 Oil-Gas: piping and storage tanks
 Pressure vessel tanks
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 Industrial: processing facilities & others

 Infrastructure: bridges
The annual capacity is 30,000 tonnes but the output has been far below that level recently.
Component Sourcing
Table 137. Hitachi Construction Machinery Indonesia: Component Sourcing for

Crawler Excavators, 2012
Diesel Engines Isuzu

Transmissions Hitachi Japan
Hydraulics Hitachi Japan
Chassis In-house
Frames In-house
Swing rings Hitachi Japan
Undercarriages In-house
Running Gear Topy Japan
Cabins Japan
Seats Meiwa Indonesia
All complex mechanical and hydraulic components are sourced from Japan. This includes diesel
engines, transmissions, hydraulic cylinders and motors. There is a still a value formula,
calculated by the Ministry of Industry, which compels Hitachi to source 45 per cent of the value
of components within Indonesia. It will reach its target by 2014. Shibaura Shearing, a
subsidiary of Hitachi, has a branch on the nearby MM 2100 industrial estate that does cutting and
fabrications. Hence, all the main welded steel elements are made locally, some in the Hitachi
factory. This includes frames, track frames, booms, and fuel and oil tanks. Seats, cabs and
batteries are also supplied by local manufacturers.
Distribution and Service: Sales of Hitachi crawler excavators are handled by PT Hexindo
Adiperkasa, the Hitachi main dealer.
Domestic Sales: Virtually the entire production of the plant is sold in the domestic market, and
in volume terms over 80 per cent of excavators sold by Hexindo come from the Bekasi and
Cibitung factories.
Exports: Exports began in 2000 and it now sells excavators into its ASEAN neighbours and
New Zealand. The fabricated steel and pressure vessels are exported all over the world. When
159
demand for excavators collapsed in the late 1990s, Hitachi Indonesia developed its skills in steel
fabrication, achieving the ASME certification for pressure vessels. Other products exported
include power plant intake and filtration systems, material handling cranes for factories and
warehouses, conveyors and components for the oil and gas industries.
Future Developments
Table 138. Hitachi Construction Machinery Indonesia: Planned Production of

Crawler Excavators, 2012-2015
(Units)
2012 2013 2014 2015

3,200 3,600 4,000 5,500
The company plans a substantial increase in production in the next few years, based on some
exports of hydraulic excavators on top of ever growing domestic volumes.
The production of components for export to other Hitachi plants will also grow. By 2014 it plans
to make 2,406 side frames for excavators from 45 to 190 tonnes, compared to 1,027 in 2010; and
140 frames for excavators from 190 to 800 tonnes, 20 more than in 2010.
PT KOMATSU INDONESIA
Address: PT Komatsu Indonesia

Jalan Raya Cakung Cilincing Km 4
Jakarta Utara 14140
Tel: +62 (0)21 4400 611

Web: www.komi.co.id
Key Personnel: Bambang Hayanto, President Director.
Background: PT Komatsu Indonesia was established in 1982. The original joint venture
company was set up to assemble imported components from Japan, but soon began
manufacturing heavy components and attachments for Komatsu machines in Japan and in
neighbouring factories in Thailand. In 1991 Komatsu, in order to remain competitive in the
international market place in the face of the strengthening yen, decided to relocate production of
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its steel castings and established a foundry plant in Indonesia. In 1992 further steps were taken
to expand steelwork production and a frame fabrication plant was also established.
The ownership of Komatsu Indonesia was initially divided between Komatsu Ltd of Japan, its
dealer PT United Tractor, Sumitomo Corporation and Marubeni. In 1995, the company floated
its shares on the Jakarta Stock Exchange. The company was then delisted in January 2006 with
94.9 per cent now being in the hands of Komatsu Ltd of Japan.
The table below summarises the plants in Indonesia.
Table 139. Komatsu: Summary of Operations in Indonesia, 2012
Site Covered
Area Area
Company Established Line of Business Location (ha) ('000 m2) Employees
Final Assembly
Komatsu Indonesia 1982 Construction equipment Cilincing 162 71 951
and hydraulic parts
Component Manufacture
Komatsu Forging Indonesia 1992 Forgings Bekasi 31 15 492
Komatsu Undercarriage Indonesia 2000 Undercarriages Bekasi 43 11 255
Komatsu Patria Attachment 2009 Blades and buckets Bekasi 30 3 50
Remanufacturing
Komatsu Reman Indonesia 2007 Remanufacture Cilincing - - 468
Remanufacturing has become a subject of great interest in recent years and in 2007 the company
began a new subsidiary, Komatsu Reman Indonesia. Its product range consists of complete
engines, power train assemblies, piston pumps and motor assemblies.
In January 2010 Komatsu purchased two per cent of the shares of its joint venture Komatsu
Remanufacturing Asia from United Tractors, so this company, which specialises in
remanufacturing the heavier equipment, has become part of Komatsu’s operations. There are
three plants belonging to KRA, totalling 178,000 m2 and employing 468 people. It is now 13
years old and has a capacity of 600 engines and 1,600 component sets.
Personnel: 951, excluding the affiliates described above.
Manufacturing Facilities: Final production is now concentrated on one site at Cilincing. The
site covers a total area of 16.2 hectares and has a covered area of 71,000 m². The integrated
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manufacturing plant was established in 1997 and the second foundry in 2004. In the latter year
the company also built a new plant for the undercarriage operations.
Product Range
Table 140. Komatsu Indonesia: Product Range, 2012
Engine Weight
Hydraulic Excavators PC200-7 143 Komatsu 20.8
PC300LC-8 241 Komatsu 31.5
PC300SE-8 241 Komatsu 33.5
PC400LCSE-7 330 Komatsu 44.2
Crawler Dozers D68ESS-12 155 Komatsu 17.6
D85ESS-2 215 Komatsu 21.5
Dump Trucks HD465-7 714 Komatsu 98.8
HD785-5 1,009 Komatsu 166.0
From the production of the first D85A-18 crawler dozer in 1983, the product range expanded
steadily until the era of Chinese and Indian sourcing that began after 2000. Komatsu Indonesia
still keeps considerable skills and expertise in fabricating larger types of equipment. The
company no longer manufactures wheeled loaders, since that market collapsed in 1997; and
motor graders stopped in 2008. The rapid rise of demand from the mining industry for dump
trucks resulted in production of two models but much of the programme sold locally still comes
from Japan. Production of the core 20 tonne crawler excavators is now shared with the plant in
Thailand.
Output
Table 141. PT Komatsu Indonesia: Production of Construction Equipment

by Type, 2007-2011
(Units)
2007 2008 2009 2010 2011

Crawler Dozers 600 900 500 1,050 1,650
Rigid Dump Trucks 150 250 200 700 1,100
Motor Graders 170 270 - - -
Total 1,920 2,820 1,700 3,710 5,350
162
The manufacturing side is divided into two operating divisions. The Construction Equipment
Division is responsible for producing heavy equipment and the Foundry Division produces
components made from steel castings.
Production of fully assembled construction equipment forged ahead in the early 1990s but fell to
fewer than 500 units in the late 1990s. The annual total finally exceeded 1,000 units once again
in 2001. Progress was made after that, albeit at quite a slow pace until 2007. Local demand then
powered a surge of growth that led to more than 5,000 machines being despatched in 2011.
Excavators are the leading product. In 2008 output grew by 40 per cent but in the poor year of
2009 it went backwards again. In 2010 it increased thanks to the improved local demand but at
that point United Tractors launched the PC200-8, which comes from Thailand with a Tier 3
engine. Sales of the Dash-7 model continued and thanks to the state of the local market even
increased somewhat. It was the larger model PC300 and PC400 that helped most in lifting
output to a record high level. The factory is committed to substantial orders to provide excavators
for the contractors who work the coal mines in Kalimantan (the dealer has invested substantial
marketing efforts in the contracting business).
Of the two crawler dozers produced, the larger volume is the 240 horsepower D85 model, which
accounts for 90 per cent of output. The prosperity of the local market allowed production to
double from 2003 to 2007. After a peak in 2008 output declined quickly in 2009. Deliverance
came in the form of the expansion of the local coal industry. Sales doubled in 2010 and added a
third in 2011.
Output of the dump trucks has soared since 2009, thanks to the massive increase of the local
market and the dominant position of United Tractors, which secures market shares of 65 to 70
per cent. Production is highly cyclical because of the investment and fleet replacement policies
of the coal mines. The two rigid dump trucks produced are the HD465-7 with 55 tonnes capacity
and the 91 tonne capacity HD785-5. In 2009 260 units were of the large truck and only 90 units
were the 55 tonne truck. By 2011 the large model was even more dominant, accounting for
nearly 800 units, as against 300 units of the smaller type.
Component production is now highly significant, generating export business.
163
Table 142. Komatsu Indonesia: Component Manufacturing, 2012
Application Component
Hydraulic Excavators Bucket
Arm
Boom
Revolving Frame
Track frame
Crawler Dozers Blade
C frame
Track frame
Under cover
Hull frame
Dump Trucks Main frame
Rear cross assembly
Side members
Component Sourcing
Table 143. Komatsu Indonesia: Component Sourcing for Construction Equipment, 2012
Crawler Excavators Crawler Dozers Rigid Dump Trucks

Diesel Engines Komatsu Japan Komatsu Japan Komatsu Japan
Transmissions Komatsu Japan Komatsu Japan Komatsu Japan
Hydraulics Komatsu Japan Komatsu Japan Komatsu Japan
Chassis In-house In-house In-house
Frames In-house In-house In-house
Undercarriages Komatsu Undercarriage Indonesia Komatsu Undercarriage Indonesia -
Running gear Komatsu Undercarriage Indonesia Komatsu Undercarriage Indonesia -
Cabins Local sub-contractor Local sub-contractor Local sub-contractor
Buckets Komatsu Patria Attachment Komatsu Patria Attachment -
When the plant opened in 1982 only 15 per cent of components were sourced within Indonesia.
By 1992 the percentage of local content had risen to 40 per cent, in 1995 it reached 45 per cent,
and by 2000 local content was 55 per cent.
The three local affiliates make significant contributions. The forging operation in Bekasi
produces brackets, cases, bosses and sprockets. The undercarriage operation in Bekasi makes
track links, shoes and related components for the crawler dozers and excavators. Finally
Komatsu Patria Attachment in Bekasi makes buckets and blades.
164
A growing number of elements are sub-contracted, mainly in the Jakarta region. For example,
PT Hanken Indonesia, a joint venture between Komatsu and Hanken Works Ltd, produces
fabricated sections for Komatsu dozers and excavators but also for Hitachi, Caterpillar and Sakai
local operations. PT Hokuriku United Forging Industry is a joint venture between Komatsu,
Hokuriku Kogyo of Japan and Nagatsu Industries, producing most of the links finished by the
Komatsu undercarriage plant. The United Tractors subsidiary Patria makes fork lift truck
frames, as well as guards and fenders for crawler dozers.
The main source for imported pieces is Japan, which supplies engines, hydraulics and electronic
components. Booms, chassis, cabs and engine covers are made locally, some of which are
sourced from PT Katsushiro, a manufacturer of welded and pressed components. Komatsu has
two foundries in Indonesia and steel cast components are destined for both local and export
markets.
Distribution: The sale and distribution of all machines made by Komatsu Indonesia is through
PT United Tractors, which has branches and representative offices spread throughout the
Indonesian Archipelago.
Exports: Komatsu Indonesia has exported components to Japan, Malaysia and Taiwan since
1995. Since 2004, components are also exported to Komatsu’s factory in Thailand.
PT SAKAI INDONESIA
Address: PT Sakai Indonesia

EJIP Industrial Park Plot 3J-1
Lemahabang Bekasi 17550
Tel: +6221 (0)21 829 9173

Website: www.sakainet.co.jp
Key Personnel: Tarmizi Alwi, General Manager.
Background: Since the late 1990s PT Sakai Indonesia has been 100 per cent owned by
Sakai Japan. It began with a joint venture called Sakai Sakti, a joint venture between Sakai
Japan and PT Tri Usaha Bakti, an Indonesian holding company.
Sakai Sakti was the first construction equipment manufacturer to establish a production unit in
the country, when it set up the facilities to assemble, repair and eventually manufacture
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compaction equipment in 1970. In 1974 the first 8 tonne static roller was produced. Since then
more than 6,000 static, self-propelled and pneumatic-tyred rollers have been produced. Other
products have not been so successful; Sakai went into co-operation with Nakayama Iron Works
of Japan, to assemble a range of mobile rock crushers, and later asphalt mixing plants in a joint
venture with Tanaka of Japan.
Turnover in 2011: $28.3 million, of which $11.0 million were parts sales.
Personnel: 200, twice as many as in 2009.
Manufacturing Facilities: The main site of 1.2 hectares, built in 1995 and extended in 2000,
has a covered area of about 4,000 m², with a large assembly shop and concrete apron for storing
newly built machines. They are on a purpose-built industrial estate in Bekasi, on the EJIP
Industrial Estate, about 40 kilometres from Jakarta. The site is bonded but not large, so Sakai
established PT Sakai Road Machinery Indonesia in 2008 at another site on the estate, specifically
to make rollers for the domestic market.
Product Range: In 2009 there was a single self-propelled model in production, the SV512D in
two versions, with an Isuzu engine for one of the Indonesian dealers and for export; and powered
by a Perkins engine for the other. In 2010 the factory started production of the model SV505,
essentially the same product but with a Cummins engine destined for the North American
market.
In August 2012 it began production of a completely new model, the SV520 and stopped the
existing models. Technical changes are a larger pump and engines to meet Tier 2 and 3
standards.
Output
Table 144. Sakai Indonesia: Production of Compaction Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

600 850 400 779 759
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Under the company charter Sakai Indonesia is obliged to export two thirds of its production
every year. This level of output is not often achieved, and in reality the output depends on the
fortunes of the local market. All markets had a poor year in 2009, as dealers were obliged to
destock in the face of falling demand. By 2011 it had got back up to a 58 per cent export ratio.
Component Sourcing: The majority of steel structural parts, chassis, frames and rolls are made
in-house. Engine mountings come from Japan, as does the vibrator. Sakai buys a number of
welded and forged components from local Indonesian suppliers, including PT Katsushiro and
Shibaura Shearing. KM Toa, a local branch of a Japanese manufacturer, makes the cab. Diesel
engines come from Japan and the UK, while the transmissions are imported from Dana in Italy.
Currently BKT of India supplies the tyres and Yokohama Rubber Thailand the hoses.
Distribution: There are two dealers selling the output in Indonesia. Equipindo uses a version
with an Isuzu engine; Traktor Nusantara is the Perkins agent in the country and prefers a version
with that power unit.
Exports: The plant sells to Vietnam, Thailand, Cambodia, Laos and Burma and since 2010
North America. Just under 200 units were exported in 2011. The model SV520 will be for sale
all over the world. It will be offered with a Tier 2 engine (Isuzu) and Tier 3 (Cummins).
PT SUMITOMO SHI CONSTRUCTION MACHINERY INDONESIA
Address: PT Sumitomo SHI Construction Machinery Indonesia

Jln. Maligi VIII Lot T-1
Kawasan Industri KIIC
Karawang, 41361
West Java
Tel: +6221 (0)21 8910 8686

Website: www.sumitomokenki.co.jp
Key Personnel: K. Iwata, General Manager.
Background: Sumitomo (S.H.I.) Construction Machinery Co. Ltd. announced in 2010 that it
would be building a plant in Indonesia to act as the construction machinery manufacturing centre
for the ASEAN region. The company created has a capital of $33 million, 85 per cent from
Sumitomo Construction Machinery Co. Ltd. and 15 per cent from Sumitomo Heavy Industries,
Ltd.
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Personnel: 250.
Manufacturing Facilities: The main site of 10 hectares began production in September 2011.
At present many structural parts come from vendors in Indonesia, so the plant’s function is
assembly.
Product Range: The first model to be produced there is the SH210, a 21 tonne model of the
latest design. Production of a 33 tonne model should begin soon, followed by a 35 tonne model.
Output: The factory produced 60 units between September and December 2011. In the first
half of 2012 it built 540 units. At the time of writing the production rate is 5 units in a day of
8 hours, so it should achieve 1,000 units in 2012.
Component Sourcing: The majority of steel structural parts, chassis and frames are made in
Indonesia by suppliers such as PT Katsushiro. Engines are from Isuzu Japan. The SHI plant in
Chiba, Japan supplies the cab at present but that could change. The Kawasaki pumps come from
Japan, as do the motors of Toshiba and others.
Distribution: For the domestic market a new operation is being created by the crane hirer Tat
Hong. This will be separate from its crane rental operation in Jakarta port. The regional office in
Jakarta places the highest priority on Thailand, where it has appointed a new dealer who will also
handle Myanmar; Indonesia and Malaysia.
Future Developments: The company has major plans for the ASEAN region and senior
executives are considering that in the medium term a volume of 2,000 to 3,000 units is a realistic
target.
DISTRIBUTOR PROFILES
In this section, profiles of all major distributors of construction equipment are presented in
alphabetical order.
After the Asian financial crash of 1997 some distributors found they could not support the
burden of a distribution network. Revenue declined by more than half in many cases, there were
few if any sales of new equipment and almost no demand for spare parts. Some distributors
ceased trading after 1998 or retrenched and contracted their activities to such an extent as to be
almost unrecognisable as a functioning distributor.
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Some manufacturers, finding their sales had collapsed and their representatives were in total
disarray, either decided to end commercial representation altogether, or set up their own office at
the hub of the region in Singapore. From 1999 onwards, European, American and Japanese
manufacturers set up offices in Singapore, or put more resources into existing facilities, often in
the purpose-built commercial area of Jurong. From this vantage point they could cover the three
key sales territories of Thailand, Malaysia and Indonesia as well as the emerging economies of
Vietnam, Cambodia and Laos.
The crash of 1997 had other far-reaching consequences on the structure of distribution in
Indonesia. Some distributors, unable to carry on and in financial trouble, sold their holdings to
the companies they represented. Kobelco, Atlas Copco and Sakai are three such examples. This
development has put a new complexion on the structure of distribution and creates a challenge to
potential new market entrants. As a consequence of injection of new capital and new
management skills, the new companies are much stronger and better organised than their
predecessors, who were often opportunistic, and lacking in long-term strategic thinking for the
brand they represented. In other words vertically integrated distribution has given much better
control to certain construction equipment manufacturers.
In the core product sectors of the market, which includes excavators, crawler dozers and dump
trucks, the door is closing on new market entrants, as the established suppliers consolidate their
hold on their respective markets. It has been notably difficult for Chinese brands to establish
themselves as new franchisees have often found results disappointing (after sales support is often
named as inadequate) and have withdrawn their support after a couple of years. The ‘giants’ in
terms of distribution are still United Tractors (Komatsu, Bomag, Tadano), Trakindo Utama
(Caterpillar) and Hexindo Adiperkasa (Hitachi, Bell, John Deere). These three companies
represent about 60 per cent of all construction equipment sold in Indonesia.
For construction equipment sectors which are still underdeveloped due to comparatively low
levels of demand, such as wheeled loaders, backhoe loaders and compaction equipment, a second
approach to distribution is evolving. Volvo and JCB provide good examples. These companies,
with a wide portfolio of products (and not unlimited resources), are based at their hub offices in
Singapore, but use local distributors in the pursuit of sales. JCB and Caterpillar have managers
in Jakarta co-operating with their distributor but such hubs do not generally have day to day
involvement in running local distribution.
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Table 145. Indonesia: Major Distributors of Construction Equipment, 2012

Mini Hydraulic Crawler Wheeled Backhoe Skid-Steer Motor Dump Asphalt Compaction Mobile Agricultural
Distributor Mobile Cranes Excavators Excavators Dozers Loaders Loaders Loaders RTLTs Graders Trucks Finishers Equipment Compressors Tractors
Altrak 1978 Grove JCB Kawasaki JCB JCB Dynapac New Holland
Atlas Copco Atlas Copco
Daya Kobelco Kobelco Kobelco New Holland New Holland
Equipindo Chicago
Mitsubishi Hanta Sakai Pneumatic
Gaya Makmur Tractors XCMG,
XCMG Takeuchi Keihatsu Shantui XCMG XCMG XCMG Vögele Hamm Foton
Hexindo Adiperkasa Bell,
Hitachi Hitachi Hitachi John Deere John Deere Hitachi
Indotruck Utama Volvo Volvo, SDLG Gehl Manitou Volvo Volvo Volvo Volvo
Intraco Penta Bobcat Volvo Volvo, SDLG Bobcat Bobcat Volvo Volvo Volvo Ingersoll Rand Mahindra
JIMAC Sany Sany
Kobexindo Doosan,
Doosan Doosan Doosan NHL
Oscar Mas Xiagong Hyundai Xiagong Xiagong Xiagong Xiagong
Panca Mitrajaya Shantui Shantui
Panca Traktor LiuGong LiuGong LiuGong LiuGong Gehl Manitou LiuGong LiuGong LiuGong
Probesco Disatama Case Case Case Case Case Case Case Elgi LS
Satrindo Mitra Utama Sany John Deere
Swadaya Traktor Hyundai Hyundai Hyundai
Trakindo Utama Caterpillar Caterpillar Caterpillar Caterpillar Caterpillar Caterpillar Caterpillar Caterpillar Caterpillar Caterpillar Sullair
Traktor Nusantara Hitachi-Sumitomo,
Link-Belt Toyota Sakai Massey Ferguson
United Equipment Terex Terex Ammann
United Tractors Tadano Komatsu Komatsu Komatsu Komatsu Komatsu Komatsu Komatsu Komatsu Bomag Kubota
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Finance has been essential for the development of the construction equipment market in
Indonesia. Deposits of 25 per cent used to be required, but some companies are demanding only
10 per cent with repayment over 24 to 36 months. Government purchases are normally
structured with a 20 per cent deposit, followed by 50 per cent when the machine leaves the
factory of origin and the final 20 per cent when the unit arrives in Indonesia.
PT ALTRAK 1978
Address: PT Altrak 1978

Jalan RSC Veteran No. 4
Bintaro
Jakarta 12330
Tel: +62 (0)21 736 1978

Website: www.altrak1978.co.id
Structure: PT Altrak 1978 is part of the Central Cipta Murdaya (CCM) Group which includes
some 33 subsidiaries and 35,000 employees. The Group is privately owned by Mr and
Mrs Murdaya and has a wide range of interests from construction and agricultural equipment to
wood and shoe manufacture. The company was founded on 12th June 1978, from which it
derives its name. The Cummins franchise was acquired in 1984, Kawasaki in 1994 and JCB in
late 2008.
In recent years the company has diversified from construction equipment sales to generating set
rental (mainly Cummins) from 20 kW to 1,000 kW. Furthermore, as part of the service operation
it sells a range of air and exhaust filters, diesel engine oil (Valvoline) and replacement
turbochargers (Holset).
Turnover in 2011: Approximately $120 million.
Personnel: 1,500, of whom 400 are located at the headquarters in Jakarta.
Franchises: Altrak 1978 is one of the largest and most successful of the ‘second tier’
distributors, sustained by its business in the mining industry and its Cummins franchise, whose
engines are used in so many applications, from diesel generators to construction equipment. The
mainstay of Altrak 1978 has been the spares business for Cummins engines, for wear parts and
consumables for tractors, wheeled loaders, fork lift trucks and equipment used in the sugar cane
sector.
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Table 146. PT Altrak 1978: Range of Franchises, 2012
Company Products
JCB Crawler excavators, backhoe loaders, telescopic handlers,
compaction equipment, power packs and lighting towers
Grove Mobile cranes
Kawasaki Wheeled loaders
Cummins Diesel engines, generating sets, marine and industrial engines
New Holland Agricultural tractors
Austoft Sugarcane harvesters
In 2008 JCB chose PT Altrak as its unique dealer for the country. In 2012 the company
relinquished the Dynapac franchise and began promoting JCB Vibromax compaction equipment.
It also moved its fork lift truck franchises (Mitsubishi, Nichiyu and Fantuzzi) into another group
company Berca Mandiri Perkasa, which also embarked upon the selling of various Chinese
construction equipment brands.
Outlets: There are sales, service and repair workshops in 29 branches throughout the country.
Branch facilities are located at:
 Adaro  Bitung  Manado  Sangatta

 Balikpapan  Bontang  Medan  Satui
 Bangka  Cikarang  Padang  Semarang
 Banjarmasin  Cilegon  Palembang  Sumbawa
 Batam  Denpasar  Pekanbaru  Surabaya
 Batu Kajang  Gunung Bayan  Pontianak  Perawang
 Bengalon  Jambi  Samarinda  Asam Reges
 Berau  Lampung  Sampit  Bandung
Sales: Before it took on the JCB franchise and began sales campaigns in 2009, construction
equipment was largely an adjunct to the main businesses of Cummins engines and mine industry
consumables. JCB, with its own manufacturer support in Jakarta, made a good beginning in
2009, taking first place in the backhoe loader market and keeping it in 2011. The Indian built
crawler excavators have made a fair start on the daunting task of building a position in market
dominated by much larger competitors. Kawasaki wheeled loaders have faded from ten to five
per cent of the market in the last three years, as a result of Yen appreciation and the difficulty of
a second tier manufacturer in penetrating the market for machines over 150 horsepower.
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Dynapac has been a disappointment and its share of the compaction equipment business was
very small.
Table 147. PT Altrak 1978: Sales of Construction Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

Wheeled Loaders 30 35 42 50 60
Backhoe Loaders - - 75 97 143
Crawler Excavators - - 13 18 82
Agricultural Tractors 390 450 120 590 680
In farm machinery, New Holland was market leader in 2011 in agricultural tractors, with a 31
per cent market share; in 2007 it won 30 per cent and in 2008 28 per cent. The best-selling
tractor is the 90 horsepower TS90 from Brazil, but lately sales of the 120 horsepower TS120
model have increased and now account for about 20 per cent of sales.
Future Developments: JCB compaction equipment has just gone on the market, led by an
Indian product, an 11 tonne soil roller.
PT ATLAS COPCO INDONESIA
Address: PT Atlas Copco Indonesia

Cilandak Commercial Estate 203
Jl. Cilandak KKO,
Jakarta Selatan 12075
Tel: +62 (0)21 780 1008

Web: www.atlascopco.com
Structure: A 100 per cent subsidiary of Atlas Copco. It concentrates on the core business of
stationary and mobile compressors. The largest part of the company’s mobile compressor
business comes from mining, which represents about 30 per cent of total sales. Second is oil and
gas at 30 per cent, with mobile units being used on oil and gas rigs for back-up and maintenance
purposes. 15 per cent of mobile units are used in manufacturing, mainly for shot blasting and
blast cleaning of structural steel. Construction plays a relatively minor role at present and only
accounts for 10 per cent of sales. This is testimony to the under developed use of compressed air
on construction sites in Indonesia. Most contractors will use a team of men with hammers and
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chisels rather than hire a relatively expensive compressor and air tools. The final segment of
Atlas Copco’s sales is the government sector, accounting for a further 10 per cent.
Turnover in 2011: Over $35 million, more than 50 per cent higher than in 2009.
Personnel: 125 employees, as in 2010.
Outlets: Sales, service and spare parts are controlled from the headquarters on the Cilandak
Industrial Estate on the outskirts of Jakarta. In addition, the company has a comprehensive
network of regional sales and service depots. Six work on mobile compressors:
 Balikpapan  Semarang  Batam

 Bandung  Medan  Surabaya
Sales
Table 148. PT Atlas Copco: Sales of Mobile Compressors, 2007-2011
(Units)
2007 2008 2009 2010 2011

87 90 77 120 125
Since the market recovered in 2001, Atlas Copco’s sales steadily increased to around
50-60 mobile compressors each year. It had even better years in 2007-2008, when its market
share rose to over 30 per cent and reached 40 per cent in 2011. Recently its sales have been
powered by tenders won from the Ministry of Public Works.
The company has a very small rental activity, centred on 40 m3/min oil-free units for
petrochemicals, textiles and the gas pipeline builders.
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PT DAYA KOBELCO
Address: PT Daya Kobelco Construction Machinery Indonesia

Wisma Pondok Indah 2
12th Floor, Suite 1202
Jalan Sultan Iskandar Muda Kav. V TA
12310 Pondok Indah
Tel: +62 (0)21 7592 2828

Web: www.dayakobelco.co.id
Key Personnel: Orimoto, President Director.
Structure: Daya Kobelco is 95 per cent owned by its Japanese parent, with a small shareholding
belonging to a local investor. The company is concentrating on two main sectors, hydraulic
excavators and mini excavators.
Personnel: 1,000, including outsourced personnel. This is 340 more than in 2009.
Franchises
Table 149. PT Daya Kobelco: Range of Franchises, 2012
Company Products
Kobelco Mini excavators; hydraulic excavators
New Holland Backhoe loaders; skid-steer loaders; wheeled loaders
The company has had the franchise for New Holland construction equipment since 2003 and
started to sell the backhoe loaders and skid-steer loaders in earnest in 2006. It has recently begun
selling the Italian wheeled loaders of New Holland.
Sales: The sales and marketing policy of Kobelco has been very successful. The company has
concentrated on the excavator market by targeting certain end-user groups. In simple terms,
these might be companies that Komatsu or Caterpillar might find too small, for example, owner
operators. Or, companies located in areas of the country that make sales and service more
difficult. End-users who might have been intimidated by the three major suppliers of excavators
have found lines of credit and a satisfactory package deal. Thus, from less than five per cent of
the excavator market in 2002, Kobelco has grown to 15 per cent in 2006 and even 19 per cent in
2010. It is currently in third place in that segment.
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Table 150. PT Daya Kobelco: Sales of Construction Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

Hydraulic Excavators 740 1,018 885 1,500 1,950
Skid-steer Loaders - - 1 3 5
The campaign in central Kalimantan to sell 4.6 tonne mini excavators has been very successful.
Plantations use the machine to clear the ground round the palm trees and to make access roads
for harvesting. The population is sparse (29 people per km2) but corporations are keen to
develop plantations, so they use the machine to clear the ground round the palm trees. The
company has sold 300 machines there to date.
Distribution and Service: Service is carried out by mobile teams of engineers who work in the
main geographical centres in Java, Sumatra and Kalimantan. There are 16 locations, working as
branches or service representative offices.
 Pekanbaru  Palembang  Surabaya

 Semarang,  Balikpapan  Banjarmasin
 Pangkal  Pinang  Pontianak
 Jambi  Medan  Bandra Lampung
 Sampit  Samarinda  Makassar
 Manado  Sorong
In 2008 it opened a large new warehouse and workshop to serve as its main depot in the
Kawasan Industri estate in Cibitung. It adds counterweights and buckets to the imported
machines there. It usually employs MTG wear parts. In February 2011 it opened a 20,000 m2
centre near Jakarta airport for used construction equipment.
Service contracts are based on different levels – a periodic inspection of the excavator after one
year or 2,000 operating hours, or more frequent inspections every 250 hours. Service contracts
can be tailored to the needs and budget of the operator.
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PT EQUIPINDO PERKASA
Address: PT Equipindo Perkasa

Equipindo Building
Jl Boulevard Raya 1
Kirana Boutique Office Blok D1 No 1 & 2
Kelapa Gading
Jakarta 14240
Tel: +62 (0)21 2937 5628

Website: www.equipindo.co.id
Key Personnel: Dr Harijanto K, President Director.
Company Formation and Ownership: Dr Harijanto founded Equipindo in 2002 but it has been
active only since 2004. Until the end of 2008 it sold Sumitomo crawler excavators. It now sells
a variety of Japanese construction equipment franchises.
Turnover in 2011: $36 million, after $25 million in 2010. These results are far better than the
$10 million achieved in 2009.
Personnel: 50.
Franchises
Table 151. PT Equipindo Perkasa: Range of Franchises, 2012
Company Product
Sakai Compaction equipment
Mitsubishi Motor graders
Hanta Asphalt finishers
Chicago Pneumatic Mobile compressors (via Sacon)
The Sakai compaction equipment is headed by the 10.5 tonne SV512D, powered by an Isuzu
engine. It will be replaced by the SV520 from September 2012. It sells the Mitsubishi motor
graders that have all been made in Thailand since April 2012.
Sales: The company concentrates on machinery orientated to the road making industry. It sells
about half of the volume of Sakai compactors retailed in the country each year and is capable of
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winning 10 per cent of the motor grader market. Its sales of 5 new Hanta wheeled finishers in
2011 gave it an impressive 46 per cent market share.
Table 152. PT Equipindo Perkasa: Sales of Construction Equipment, 2009-2011

(Units)
2007 2008 2009 2010 2011

Motor Graders 47 51 22 78 107
Mobile Compressors - - 22 20 20
Asphalt Finishers 3 1 - - 5
Crawler Excavators 20 15 - - -
Distribution and Service: Equipindo maintains its head offices in the centre of Jakarta and
workshop and warehousing facilities in Bekasi, on the outskirts of Jakarta. It provides sales and
service through a network of 10 outlets:
 Bekasi – Jakarta  Pontianak  Pekanbaru

 Samarinda  Banjarmasin  Semarang
 Surabaya  Palembang  Makassar
 Medan
Future Developments: The company is interested in entering the backhoe loader business,
possibly with a Turkish product.
PT GAYA MAKMUR TRACTORS
Address: PT Gaya Makmur Tractors

Jl. Lingkar Luar Barat 3
Rawa Buaya
Cengkareng
Jakarta 11740
Tel: +62 (0) 21 581 6899

Web: www.gmtractors.com
Key Personnel: Tjandi Mulyono, President Director.
Structure: Gaya Makmur Tractors is one of the key players in promoting Chinese construction
equipment in the market. The company was established in 2005 and only began trading seriously
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in 2006. Since then the 40,000 m² site on the outskirts of Jakarta has been transformed into a
large scale depot for Chinese equipment of every type. It has created there a store of spare parts
and a fully equipped service facility, a much higher level of support than previously seen in
respect of Chinese construction equipment.
Personnel: 100 technical and administrative staff.
Franchises
Table 153. PT Gaya Makmur Tractors: Range of Franchises, 2012
Company Franchise
Wirtgen Cold planers
Vögele Asphalt finishers
Hamm Compaction equipment
XCMG Graders
Wheeled loaders
Backhoe loaders
Mobile cranes
Crawler excavators
Keihatsu Crawler excavators
Takeuchi Mini excavators
Foton Agricultural tractors
Morooka Crawler dumpers
Yamaguchi Crawler dumpers
Shantui Crawler dozers
The main franchises held by Gaya Makmur Tractors are the Wirtgen Group and three Chinese
manufacturers, XCMG, Foton and Shantui. The last of these is the manufacturer of the
excavators named by Gaya Makmur as ‘Keihatsu’. The company is actively selling Vögele
asphalt finishers and Hamm compaction equipment, with some stock held at the Jakarta depot.
The policy of Gaya Makmur Tractors is to establish the company with basic machines that
require a minimum of attention. The most satisfactory performers have been the various XCMG
products. Foton proved to be a disappointment in respect of the agricultural tractors launched in
2007. The emphasis now is on selling Chinese excavators, taking on the strong market positions
of Komatsu, Hitachi and Caterpillar. With prices at approximately half the current competition,
the management at Gaya Makmur Tractors believe they can attract sufficient customers to make
a success of that business.
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Sales
Table 154. PT Gaya Makmur Tractors: Sales of Construction Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

Crawler Excavators - - - - 100
Crawler Dozers 40 60 30 30 35
Gaya Makmur Tractors has been trading fully for only six years, but has already made a name for
itself as the leading supplier of Chinese machines, especially mobile cranes, crawler dozers,
graders and wheeled loaders. The Wirtgen Group machines sell in a different price bracket but
the company has nevertheless established a foothold, a 7 per cent share for the compactors and
occasionally the market leader in asphalt finishers. The franchise would be worth much more if
only the government would organise new road construction more effectively.
Distribution and Service: The head office of the company is located in the centre of Jakarta
with workshops and spare parts centre some 30 kilometres outside the capital in the industrial
area of Bekasi. The company has so far started up offices in:
 Balikpapan  Palembang  Makassar  Tarakan

 Pekanbaru  Medan  Banjarmasin  Kendari
Other depots are planned around the country in Kalimantan and Sulawesi to service new
customers.
Future Developments: 2012 is witnessing the launch of Takeuchi mini excavators and two
Japanese brands of crawler dumpers, Yamaguchi and Morooka.
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PT HEXINDO ADIPERKASA Tbk
Address: PT Hexindo Adiperkasa Tbk

Kawasan Industri Pulo Gadung
Jl Pulo Kambing II Kav I-II No 33
Jakarta 13930
Tel: + 62 (0)21 461 1688

Web: www.hexindo-tbk.co.id
Key Personnel: Kardinal A. Karim, President Director.
Structure
Table 155. PT Hexindo Adiperkasa Tbk: Structure of Shareholders, 2012
% of
Shareholders Shares
Hitachi Construction Machinery – Japan 48.59
Itochu Corporation – Japan 22.55
Public 23.79
Hitachi Construction Machinery Asia Pacific 5.07
Total 100.00
PT Hexindo Adiperkasa was first incorporated in 1988, primarily to distribute Hitachi products.
It was listed in 1995 on the Jakarta and Surabaya stock exchanges. The main activity remains the
sale, rental and service of Hitachi construction equipment. The company provides equipment
maintenance services for customers including parts and in-field maintenance. It has had a
remanufacturing facility since 1995. To complement the range of Hitachi excavators,
PT Hexindo Adiperkasa has formed some useful alliances for distribution of complementary
equipment including dump trucks, wheeled loaders, compaction equipment, asphalt finishers and
tractors.
Turnover: Hexindo’s sales doubled between 2006 and 2008, with a very positive effect on
earnings. In 2009 the company moved to a Japanese style fiscal year and the reporting currency
changed to the US dollar. In fiscal 2009 (the year ends in March as in Japanese companies)
revenues were up by 35 per cent. In the following year they rose by 46 per cent. The results for
fiscal 2011 are not available at the time of writing but the figures in the last column refer to the
first three quarters of the year. Sales were up 28 per cent; net income was up by 60 per cent.
181
Table 156. PT Hexindo Adiperkasa Tbk: Revenue and Net Profit, 2007-2011
($ Million)
Jan-March April 2009- April 2010- April 2011-

2007 2008 2009 March 2010 March 2011 December 2011
Net Sales 189.1 293.1 50.6 341.1 498.6 458.8
Net Income 6.4 24.5 6.1 34.0 43.1 48.2
Like other mature businesses Hexindo has developed strong income streams from service and
parts. In fiscal 2010 service income was worth $60.2 million and parts sales generated $94.5
million.
Personnel: 1,200 people, including 300 temporary staff.
Franchises
Table 157. PT Hexindo Adiperkasa Tbk: Range of Franchises, 2012
Company Franchise
Hitachi Full range
Atlas Copco Hydraulic hammers
Rotobec Grapples for wood
John Deere Construction equipment and forestry
Waratah Harvesting heads
Donaldson Filters
The company started with the distribution of Hitachi construction equipment in 1990, adding
John Deere backhoe loaders in 1993 and John Deere motor graders in 1995. Since 2000 it has
added Rotobec log grapples and Waratah harvesters.
Sales: Hexindo kept its market share in crawler excavators at or very near the level of 26 per
cent for the whole of the period from 2001 to 2010. The effects of the interruption to production
caused by the tsunami in Japan in March 2011 temporarily reduced its market share to 20 per
cent as its parent’s factories were severely affected. Approximately 65 per cent of Hitachi’s unit
sales of excavators are of its 20 and 21 tonne models ZX 200 and 210. In the rest of the market it
is very strong in the 11 tonne size, where it is the only supplier and has sold more than 1,000
machines in the last two years. In mining excavators over 100 tonnes it did very well in 2010
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and 2011, with 56 machines sold and installed in each year, thanks to greater production capacity
back in Japan.
Table 158. PT Hexindo Adiperkasa Tbk: Sales of Construction Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

Mini Excavators 1 - - - 7
Crawler Dozers - 22 2 11 19
Articulated Dump Trucks 24 5 5 3 -
Rigid Dump Trucks 20 20 32 20 36
Backhoe Loaders - - - 2 10
Motor Graders - - 2 - 6
In the rest of the range the performance has been uneven. Wheeled loaders have good and bad
years and struggle below five per cent and the rigid dump trucks have a market share that has slid
from five to two per cent in the last five years, which is not adequate, given the company’s
proclaimed wish to win clients in the mining market. The Bell articulated dump trucks do even
less well.
Distribution and Service: Sales and service centres are now located in 32 centres throughout
Java, Sumatra, Kalimantan and Sulawesi. There are eight main branches, two sub-branches and
multiple representative offices. Many of these centres have a semi-permanent status as they
serve local coal mines, such as the various projects mentioned below:
 Jakarta  Pama Bontang Project  Pekanbaru  Banda Aceh

 Sampit  Pama Kideco  Adaro SIS Project  Jambi WKS Project
 Palu  Thiess Melak  Batu Licin  Palembang
 Tarakan  Makassar  Gunung Bayan Project  Tanjung Pandan
 Bandar Lampung  Samarinda  KPC Project Sengatta  Balikpapan
 Medan  Semarang  Thiess Satui  Berau
 Pankal Pinang  Paso  Manado  Gunung Bayan LBE Project
 Pama Adaro Project  Jambi  Pontianak  Inco Sorowako
 Banjarmasin  Padang  Surabaya  Thiess Senakin
The Jakarta branch remanufactures medium machinery like 20 tonne excavators; the Balikpapan
branch has been involved in the remanufacturing of very large machines since 2005 and opened
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new premises of 20,000 m2 in 2009. The latest opening of a major branch was in April 2012 at
Pontianak.
Future Developments: In calendar year 2012 the company is predicting a growth in sales of
about 19 per cent, to around 3,500 units. The strong emphasis on supplying hydraulic excavators
will continue. In recent years the importance of coal mining has overshadowed all other
applications and the company has reacted by supplying service teams to guarantee 24 hour call
up, 365 days a year. Some teams are permanently placed at the larger mines to make sure
machines keep working and to supply necessary on-site maintenance.
PT INDOTRUCK UTAMA
Address: PT Indotruck Utama

Jalan Raya Cakung Ciling Kav. 3A
Semper Timur
Jakarta 14130
Tel: +62 (0)21 441 2168

Website: www.indotruck-utama.co.id
Key Personnel: Vendry Liarto, Sales Director.
Company Formation and Ownership: Indomobil Group, a vehicle marketing business

covering Renault Group and VW-Audi cars among others, established Indotruck in 1988 and
now owns 75 per cent of it. It has the Volvo Trucks franchise for all of Indonesia outside
Kalimantan since 1998, a territory under the control of Mr Eric Ng of Malaysia, who also owns
the remaining 25 per cent of Indotruck Utama.
In 1991 Indotruck went into mechanical handling via the Kalmar fork lift truck franchise, adding
Manitou in 1996. In 2006 it went into mainstream construction equipment by acquiring the
LiuGong franchise and into the farm machinery business via YTO agricultural tractors. One of
the Indomobil shareholders is the giant Salim Group, a conglomerate that is a food producer by
history. It has moved into oil palm plantations, hence the interest in farm machinery.
In September 2011 the company accepted an offer to take up the representation of Volvo
construction equipment. The company will be handling Sumatra, Java, Nusa Tenggara and
Papua. The existing dealer Intraco Penta will still be covering Kalimantan, Sulawesi and
Maluku. Indotruck will also take up the products of the Chinese manufacturer with which Volvo
is associated, SDLG in the same islands.
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Indotruck, through its subsidiary PT Indotraktor Utama, has also become the dealer for some
Chinese products, namely Saonon generator sets and Sunward static piles and rotary drilling.
Indotruck Utama will focus on European and American brands, while Indotraktor Utama will
focus on Chinese brands.
Personnel: 730, including all the employees involved in the truck businesses.
Franchises
Table 159. PT Indotruck Utama: Range of Franchises, 2012
Company Products Company Products

Off-Highway Other Products
Manitou Telescopic handlers and access platforms Volvo/Renault/Mack Trucks
Gehl Skid-steer loaders Volvo Buses
SDLG Construction equipment* Cargotec Port Handling machinery
Volvo Construction equipment*
* Sumatra, Java, Bali, Nusa Tenggara and Papua only.

During 2012 the company disengaged from all the Chinese construction equipment franchises
that it had, including the YTO agricultural tractors.
Outlets: Indotruck Utama maintains its head offices, workshop and warehousing facilities in
Cilincing, on the outskirts of Jakarta. It provides sales and service for the four main construction
equipment franchises of Volvo, SDLG, Gehl and Manitou through the network shown below:
Branches Sites
 Pekanbaru  Banjarmasin  Duri  Lampung
 Bengkulu  Samarinda  Pangkalan Kerinci  Narogong
 Medan  Soroako  Minas  Cilegon
 Jambi  Surabaya  Batang Toru  Semarang
 Palembang  Sorong  Muara Bungo  Lahat
 Balikpapan   Ketahun  Timika
 Koba Bangka  Mataram
 Muara Enim
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In Java and Sulawesi the Gehl and Manitou products join the Volvo and Renault Trucks in being
sold through branches in Jakarta and Soroako and six associated sites. In Kalimantan they join
Renault Trucks in the three branches of Balikpapan, Samarinda and Banjarmasin. There are 10
Indotruck sites on the island.
Sales
Table 160. PT Indotruck Utama: Sales of Construction Equipment and

Agricultural Tractors, 2007-2011
(Units)
2007 2008 2009 2010 2011

Rough Terrain Lift Trucks 12 12 15 - -
Telescopic Handlers 3 4 5 29 40
Skid-Steer Loaders - 9 6 4 8
Discontinued Chinese Products
Crawler Dozers 2 21 16 4 7
Motor Graders - 11 5 6 15
Crawler Excavators - 13 7 14 18
Rigid Dump Trucks - 44 10 5 -
Mobile Cranes - 2 1 - -
Agricultural Tractors - 20 40 20 10
This table is unique, since it details the sales performance of products that the company has
mostly stopped selling. The Manitou products easily dominate the small area of masted and
telescopic handlers. From 2008 to 2011 the LiuGong range was the centre of interest. If one
judges it by the wheeled loaders, then it was a success, given that in three years it has reached a
14 per cent market share and third place. The franchise is now in the hands of an independent
importer run by the former sales manager of the lines at Indotruck.
Future Developments: Indotruck grew rapidly after 2006 with Chinese products. All those
franchises have gone and the SDLG line-up is short and not a replacement. Since late 2011 the
company has been working on the marketing of Volvo construction equipment in Sumatra, Java,
Bali, Nusa Tenggara and Papua. There is now an emphasis on Volvo’s high class and high price
machinery for the construction, quarry and plantation sectors. The allotted territories have less of
a mining bias than places like Kalimantan but the company will be keen to do as well as possible.
186
PT OSCAR MAS
Address: PT Oscar Mas

Sastra Graha Building 3rd A Floor
Jalan Raya Pejuangan No 21
Jakarta 11530
Tel: +62 (0)21 536 1333

Website: www.oscarmas.co.id
Key Personnel: Williem Tanjung, President Director.
Company Formation and Ownership: The company was established in 2007 and started
business in 2008 as the sole agent of Xiamen XGMA Machinery, the Chinese wheeled loader
manufacturer popularly known as Xiagong. In 2009 it became an agent of Hyundai HI, and took
on the dealership for Dongfeng Liuzhou Motor Co. In two years of business it managed to sell
no fewer than 300 units, a very rapid beginning.
Turnover in 2011: $50 million, a massive leap from the $20 million achieved in 2010. These
were both much better years than 2009 (€8.5 million) and the 2008 result of $9.0 million.
Personnel: 220, 70 per cent more than in 2010.
Franchises
Table 161. PT Oscar Mas: Range of Franchises, 2012
Company Products
XGMA Xiagong Wheeled loaders, motor graders, crawler dozers and compaction equipment
Chenglong Construction-type trucks
Hyundai HI Hydraulic excavators, wheeled loaders
187
Outlets
Oscar Mas opened four branches in 2008 and two in 2009. The network now extends to:
 Balikpapan (East Kalimantan)  Banjarmasin (South Kalimantan)

 Surabaya (East Java)  Medan (North Sumatra)
 Pekanbaru (Riau)  Palembang (South Sumatra)
 Bengkulu  Manado (North Sulawesi)
 Makassar (South Sulawesi)  Sampit (Pangkalan Bun)
It has offices in Semarang and Denpasar (Bali); and plans to build branches in Kendari and
Matarang.
Sales
Table 162. PT Oscar Mas: Sales of Construction Equipment, 2008-2011

(Units)
2008 2009 2010 2011

Hydraulic Excavators - 10 130 435
Wheeled Loaders 75 70 100 130
Motor Graders 30 20 30 50
Crawler Dozers 30 5 15 30
Compaction Equipment 40 30 22 32
The company was set up with the express aim of selling Xiamen wheeled loaders, with an
energetic young sales force. Oscar Mas has a full range of sizes on offer, all with Shanghai
Cummins engines, and has a number of other XGMA products on its books (led by motor
graders and compaction equipment). In three years it has sold 300 wheeled loaders, putting it in
equal first place among Chinese suppliers with LiuGong. Nevertheless the smallness of the
loader market as a whole remains, and so the company must always try to penetrate other areas.
The motor graders and compaction equipment have already done well, outselling all other
Chinese products and taking five per cent of the market.
Its taking of the Hyundai franchise is obviously an attempt to enter a much more important
product segment, namely that of crawler excavators but it will be in competition with the
188
established importer Swadaya. Both had a good year in 2011 as Japanese competitors struggled
with the effects of the tsunami.
Future Developments: In 2012 the company is building a complex of offices, warehouse and
workshops at the MM2100 Industrial Estate at Cibitung-Bekasi, near Jakarta. The site covers
15,060 m2.
PT PROBESCO DISATAMA
Address: PT Probesco Disatama

KEM Tower 15th Floor
Jalan Landasan Pacu Barat
Blok B10 Kav.2
Kota Baru Bandar Kemayoran
Jakarta 10610
Tel: +62 (0)21 6570 4111

Web: www.probesco.com
Key Personnel: Saripin Taidy, President Director.
Company Formation and Ownership: Founded in 1980 as a private company, the business
grew on the supply of spare parts for the construction and forestry industries including hydraulic
hoses, wear parts and a range of industrial consumables. The company survived the Asian
financial crisis partly because of its extensive spares and consumables business and partly
because it had developed markets with palm oil plantation owners and logging companies. Since
the late 1990s it been the representative for Case industrial and construction equipment and this
has changed the strategic direction of the business. It has just taken on the Dynapac franchise for
Indonesia. Its business segments are mining and construction; agriculture and forestry; terminal
and material handling; and industrial parts and components.
Turnover in 2011: $40 million, 60 per cent higher than in 2009.
Personnel: 350, more than three times as many as in 2007.
Franchises: The company took on the Dynapac franchise in June 2012. At the time of writing it
had contacted all existing users but had not yet executed a full launch.
189
Table 163. PT Probesco Disatama: Range of Franchises, 2012
Company Franchise
Case Backhoe loaders, wheeled loaders, skid-steer loaders, graders,
crawler dozers, articulated dump trucks
Dynapac Road making machinery
Elgi Air compressors, mobile and industrial
LS Agricultural tractors
HIAB Log grappling and handling cranes
Gates Belts and hydraulic hoses
ZF Steering parts and clutches
Husqvarna Chainsaws, mowers
Fessco Air, water and oil filters
Outlets: There are now 14 locations where new machines are sold and maintenance and parts
can be ordered:
 Jakarta  Surabaya
 Palembang  Sampit
 Jambi  Padang
 Pekanbaru  Medan
 Balikpapan  Pontianak
 Banjarmasin  Makassar
 Berau  Samarinda
The company plans to open branches in Bengkulu, Bangka, Ketapang, Palangkaraya, Tarakan,
Semarang, Palu, Manado, Kendari, Kupang, Ambon, Ternate, Sorong and Biak.
Sales
Table 164. PT Probesco Disatama: Sales of Construction Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

Crawler Dozers 5 5 5 1 -
Agricultural Tractors - 60 60 50 100

190
The most significant construction equipment product is Case backhoe loaders, where it was the
market leader in 2007 and 2010. Wheeled and skid-steer loaders both sell moderately well, as do
the Brazilian built motor graders.
The LS tractors are marketed to the oil palm plantations. A tractor can be equipped with a HIAB
grab to pick up pile of oil palm fruit from the ground and then place them in a bin. A grab can
then slide the bin onto a small truck for transport to the crusher. Probesco can thus supply the
tractor, grab, bin, bin carrier and the truck.
Future Developments: With the core Case franchise having been focused on construction and
mining in the past, the company has applied its energies to innovative diversification. The latest
example is the Dynapac franchise, which is just starting at the time of writing.
PT SATRINDO MITRA UTAMA
Address: PT Satrindo Mitra Utama

Jalan Sunter Agung Podomoro
Blok N2 No. 9-10
Sunter
Jakarta 14350
Tel: +62 (0)21 651 9127

Website: www.satrindo.com
Key Personnel: Irwan Sjaichudin, Owner.
Company Formation and Ownership: Established in 2001 by the Sahabat Group, which sells
among other things, spare parts for agricultural tractors, Satrindo has been the official John Deere
farm machinery importer since then. It then took on the franchise of Cameco sugar cane
equipment, a company that now belongs to John Deere.
Personnel: 80, excluding branch staff.
Franchises: Besides its agricultural tractors, which currently come from Mexico, Germany,
China and USA, the company sells a wide range of implements, much of it made in Brazil (Jacto
and Jumil). They are especially adapted to the needs of tropical agriculture systems. In 2012 the
191
company diversified into crawler excavators, taking on the Sany Chinese product to sell to
plantations.
Table 165. PT Satrindo Mitra Utama: Range of Franchises, 2012
Company Franchise
John Deere Agricultural tractors
Cameco Cane harvesters and loaders
Jumil Planters
Baldan/CMT/KMT Cultivators
Howard Rotavators, fertiliser spreaders
Jacto Sprayers
FAE Land clearance machinery
Cane Thumper Walk-behind cane cutter
Coolpower Gensets
Tailift Fork lift trucks
Sany Hydraulic excavators
Outlets: The company currently has 16 branches, located in:
 Lampung (2)  Pontianak  Gorontalo

 Palembang  Banjarmasin  Manado
 Medan (2)  Surabaya  Sampit
 Pekanbaru  Bali  Ujungpandang
 Jambi  Samarinda
Sales
Table 166. PT Satrindo Mitra Utama: Sales of Agricultural Tractors, 2007-2011

(Units)
2007 2008 2009 2010 2011

320 400 380 525 608
Satrindo Utama is second in the tractor market in 2011, with a market share of 28 per cent. The
best-selling models accounting for 80 per cent of sales are the Mexican-built 5715 at
75 horsepower and the 6615, rated at 95 horsepower.
192
The planned volume for 2012 is 800 units. It started selling the Sany excavators in March 2012
and sold 30 in the first four months.
Future Developments: As Deere’s range of products for developing countries expands at a

rapid pace, the suitability of the company’s products grows. It is confident of selling 800
agricultural tractors in 2012. It will continue to concentrate on sugar cane and palm oil growers.
Both crops are priorities for the government, the former to build up an industry that can supplant
imports.
PT SWADAYA TRAKTOR ADIPERKASA
Address: PT Swadaya Traktor Adiperkasa

Kompleks Perkantoran Gading Bukit Indah
Blok A No 12-15 Kelapa Gading
Jakarta Utara 14240
Tel: +62 (0)21 9292 8789
Key Personnel: Sjahrial Ong, Chairman/President Commissioner.
Company Formation and Ownership: In 1999 the truck dealer Mandiri Traktor took up the
Hyundai construction equipment franchise after the collapse of the previous holder. Mr. Ong led
that activity until 2002 when he left the company to set up Swadaya Traktor and won the
franchise. From 2005 to 2008 the company imported Hyundai products on an SKD basis but
with the disappearance of the import tariff this became a redundant activity.
The group contains two rental companies, Anugrah Energi Manindo and Swadaya Bintang
Lestari, and a contracting business.
Personnel: 100.
193
Franchises
Table 167. PT Swadaya Traktor Adiperkasa: Range of Franchises, 2012
Company Product
Hyundai Full range
Sales
Table 168. PT Swadaya Traktor Adiperkasa: Sales of Construction Equipment, 2008-2011

(Units)
2008 2009 2010 2011

Crawler Excavators 160 110 110 335
Wheeled Loaders 20 10 10 10
Swadaya has been working hard to re-establish Hyundai but the manufacturer has only one truly
competitive product, the crawler excavator. Unfortunately the competitors are able through large
branch networks to offer high quality support that a much smaller independent cannot match.
Swadaya does well to gain a three per cent market share but it is difficult to see how much
further it can go. The manufacturer likes to offer basic, value-for-money machines but that is
exactly what the local market leaders already do by doing without the features that make them
dearer in other markets. Secondly, the machines appeal to the kind of small coal producer that
has high operating costs and faces a hard time for the next 18 months while spot coal prices are
low.
Distribution and Service: Swadaya has a 10,000 m2 workshop area at Sentul, Bogor on Java
and active branches in:
 Samarinda (2)  Banjarmasin (South Kalimantan)  Bangkulu

 Sidoarjo ( Java)  Medan (North Sumatra)  Pekanbaru
 Makassar (Sulawesi)  Balikpapan  Manado
 Surabaya  Klunglung
194
It has opened five new branches since 2009, the latest being Klungkung in Bali in September
2012. A further 23 independent sub-dealers also participate in sales and service. Most of them
are Hyundai truck dealers.
Future Developments: The company did examine the possibility of taking on a franchise of
Chinese construction equipment with a wide range of products that included 6x4 dump trucks,
off-highway trucks, compaction equipment and motor graders. It finally viewed the products as
insufficiently distinguished from the competition and stayed with the Hyundai franchise, while
recognising that it has a competitor in the form of a second holder of the franchise, namely PT
Oscar Mas.
PT TRAKINDO UTAMA
Address: PT Trakindo Utama

TMT 1 Building
Jl. Cilandak KKO No. 1
Jakarta 12560
Tel: +62 (0) 21 782 2373

Web: www.trakindo.co.id
Structure: PT Trakindo Utama was established in 1970 by Mr Ahmad Hadiat Kismet Hamami,
a retired Indonesian Naval Forces colonel, to take on the distribution rights for Caterpillar in
Indonesia. Trakindo has since grown into one of the strongest distributors of construction
equipment in the country. Trakindo Utama is structured into four divisions which deal with
specific market sectors:
 Construction
 Forestry and Agriculture
 Mining
 Energy
The privately owned group, controlled by a holding unit called Tiara Marga Trakindo (TMT),
has 12 subsidiaries. One affiliate called PT Chakra Jawara markets Iveco and Kenworth trucks.
PT Chitra Paratama markets Michelin and Nokian off-highway tyres and truck/bus tyres from
Michelin. PT Sumberdaya Sewatama is a generator rental company. PT Reswara Minergi
Hartama is a coal production company, while PT Cipta Kridatama is a contract mining company.
One of the newest, Tri Swadarna Utama, is a Mercedes-Benz truck and bus dealership.
195
Personnel: 5,500 in Trakindo Utama.
Franchises
Table 169. PT Trakindo Utama: Range of Franchises, 2012
Company Franchise
Caterpillar Full range of construction and forestry equipment and diesel engines
Sullair Portable compressors for construction
Sykes Pumps
Lako Premio Forestry harvesting heads
Paccar/Allied Winches
Nexus Undercarriages for non-Cat products
Baldwin Filters
Alongside the full range of Caterpillar products, Trakindo markets a number of other items,
notably Sykes pumps (since 2000) and Nexus undercarriage parts that are suitable for Komatsu
and Hitachi excavators. Other TMT group companies sell products that were at one time part of
the Trakindo catalogue, such as Michelin tyres.
Sales
Table 170. PT Trakindo Utama: Sales of Construction Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

Crawler Excavators 905 1,108 591 770 1,300
Crawler Dozers 630 561 365 530 760
Crawler Loaders 5 3 - - -
Telescopic Handlers - - - 5 13
Motor Graders 101 159 130 120 320
Articulated Dump Trucks 35 257 112 211 176
Motor Scrapers - 2 2 -
Asphalt Finishers - - 1 4 4
Total 2,013 2,447 1,563 2,125 3,478
196
2007 and 2008 were very busy years, marked by impressive increases in sales of crawler
excavators, motor graders and dump trucks. The decline of 36 per cent in the number of units
delivered in 2009 was unwelcome and more serious than that suffered by others, partly because
2008 had been so high.
From that point volumes recovered swiftly and had more than doubled by 2011. Crawler
excavators, dozers and rigid dump trucks were among the best performers. They account for
around 70 per cent of sales by unit volume. This pattern will continue for the foreseeable future.
Strong demand from the mining sector will underpin growing sales of both articulated and rigid
dump trucks, with the emphasis on trucks above 100 tonnes.
Trakindo has strong market positions in every segment of the market but crawler excavators are a
problem area. Its market share has fallen from 27 per cent in 2002 to 12 per cent in 2009. It has
retreated from the 12 tonne class that do not do well, and above 30 tonnes it has little success
against Komatsu in the mines. Its Japanese rival sold almost 10 times as many excavators of this
type in 2011. It is also behind in crawler dozers but not far, in that Komatsu sells a little over
three times as many units to the mines.
Distribution and Service: Trakindo Utama operates from impressive premises in the centre of
the Cilandak Industrial Estate, also the location for several other significant suppliers of
construction equipment. Sales, service and spare parts are organised from this site, as is the
extensive reconditioning and repair of machinery, rebuilding of engines and other major
engineering capabilities.
The company distributes its products from its headquarters and through a powerful nationwide
network of 42 branches. Its largest facilities outside Jakarta are at Medan and Ujung Pandan, but
the largest revenues are generated by the Balikpapan branch serving the coal fields of
Kalimantan.
197
Branch facilities are located at:
 Jakarta  Padang  Pangkalan Bun  Ternate

 Bandung  Pekanbaru  Sampit  Ambon
 Semarang  Jambi  Sangata  Sorong
 Surabaya  Palembang  Senakin  Jayapura
 Denpasar  Bengkulu  Kelian  Tembagapura
 Kupang  Bandar Lampung  Ujung Pandang  Merauke
 Manggar  Balikpapan  Soroako  Biak
 Pangkal Pinang  Banjarmasin  Manado  Batam
 Medan  Samarinda  Palu  Singapore
 Lhak Seumawe  Tarakan  Luwuk  Kendari
 Banda Aceh  Pontianak
There are two component rebuild centres at Freeport and Samarinda. The company also operates
a Cat Rental Store, having moved its former rental operation, Cipta Kridatama out of that
business and into a coal mine operation.
PT TRAKTOR NUSANTARA
Address: PT Traktor Nusantara

Jalan Pulogadung No. 32
Kawasan Industri Pulogadung
Jakarta 13930
Tel: +62 (0)21 460 8836

Website: www.traknus.co.id
Key Personnel: Wayan Parkar, President Director.
Company Formation and Ownership: PT Traktor Nusantara was established in 1974 to

distribute the range of Massey Ferguson agricultural tractors and construction equipment. It is
50 per cent owned by Sumitomo Corporation and 50 per cent by Astra International.
Astra International is an investment and holding company with interests in the automotive
industry, financial services, heavy equipment, agribusiness, information technology and
infrastructure. It is a major shareholder in PT United Tractors, the Komatsu distributor.
Turnover in 2011: $158 million, nearly double the figure of 2009.
198
Personnel: 570, 27 per cent more than in 2010.
Franchises
Table 171. PT Traktor Nusantara: Range of Franchises, 2012
Company Products
Hitachi-Sumitomo Crawler cranes
Link-Belt Truck-mounted cranes
Sakai Compaction equipment
Toyota/Raymond/BT Fork lift trucks
Perkins Engines and generating sets
FG Wilson Generators
Gardner-Denver Industrial compressors
Massey Ferguson Agricultural tractors
PT Traktor Nusantara is one of the longest-established and best organised distributors. It bases
itself nowadays on the Perkins franchise and everything associated with engines and power
generation. The earliest franchise was Massey Ferguson, started in 1974. In 2003 it took on the
Sakai franchise, on the condition that the locally made soil roller it wanted had a Perkins engine.
In 2006 it added the JCB franchise but could not sell the hydraulic excavators because of the
Astra connection. JCB eventually moved its franchise away from Traktor Nusantara in 2008.
Outlets: Sales, service and spare parts are controlled from the headquarters on the Pulogadung
Industrial Estate on the outskirts of Jakarta. In addition, the company has a comprehensive
network of 21 regional sales and service depots.
 Medan  Pekanbaru  Padang

 Jambi  Palembang  Bandar Lampung
 Semarang  Surabaya  Bandung
 Ketapang  Banjarmasin  Samarinda
 Balikpapan  Pontianak  Makassar
 Sampit  Pangkalan Bun  Palu
 Jayapura  Sangatta  Bali
199
Sales
Table 172. PT Traktor Nusantara: Sales of Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

Rough Terrain Cranes - - - 1 6
Crawler Cranes - - - - 3
Backhoe Loaders 65 125 75 - -
In construction equipment there are two live areas at present, the Sakai compaction equipment,
of which it sells about half of the national total; and the mobile cranes, which have intermittent
sales.
The Massey Ferguson tractors were the market leader in 2005-2006, then fell to fourth place but
recovered by 2009 to win second position. Since then they have returned to the 20 per cent share
they had before and are in third place. They have a strong name in the plantations with the
82 horsepower model 440 Extra, produced in Brazil.
Future Developments: Plantation agriculture is one of the main areas of focus for Traktor
Nusantara. The company is in a good position to supply many of the needs of the oil palm
plantations and commercial paper mills and their plantations. For the expansion of the sugar
cane industry, the company is confident it will have a strong offering in the Brazilian 600 series,
150 to 170 horsepower and hailing from a country with many tropical products similar to those
of Indonesia.
PT UNITED TRACTORS Tbk
Address: PT United Tractors Tbk

Jalan Bekasi Raya Km 22
Cakung
Jakarta 13910
Tel: +62 (0)21 245 7999

Website: www.unitedtractors.com
Key Personnel: Djoko Pranoto, President Director.
200
Company Formation and Ownership: Founded in 1972, PT United Tractors is by far the
largest and most powerful construction equipment distributor in the country. In 1973 the
company became distributor for Komatsu heavy equipment, Sumitomo Link-Belt and Tadano.
In the following year it took on the Bomag product and Komatsu fork lift trucks. In 1982 it took
part in the founding of PT Komatsu Indonesia, in 1983 it added a manufacturing facility of its
own that has at various times made John Deere agricultural tractors, Niigata asphalt plants and
Komatsu fork lift trucks, among others.
In 1989 UT went public as PT United Tractors Tbk and listed its shares on the Jakarta and
Surabaya Stock Exchange. With 3.73 billion listed shares, UT's current shareholders are
composed of 59.5 per cent PT Astra International Tbk and 40.5 per cent public. In the same
year, PT Pamapersada Nusantara (Pama) was established as a surface mining contractor, marking
the entry of the company into its second major area of business.
A significant milestone was reached in 1997, when Komatsu Remanufacturing Asia (KRA) was
established in Balikpapan, 51 per cent owned by UT and 49 per cent owned by Komatsu Asia
Pacific Pte. Ltd., Singapore. KRA is engaged in overhauling and reconditioning Komatsu heavy
equipment.
Structure
Table 173. PT United Tractors: Company Subsidiaries, 2012
Formation Ownership
(Year) (%) Activity
Construction Equipment
PT United Tractors Pandu Engineering 1983 100 Production of machinery, parts and attachments
PT UT Heavy Industry 1994 100 Trading heavy equipment in Singapore
PT Pamapersada Nusantara 1993 100 Mining contracting
PT Bina Pertiwi 1976 100 Kubota and Komatsu Utility products
PT Multi Prima Universal 2008 100 Rental and used equipment sales
PT Universal Tekno Reksajaya 2011 100 Remanufacturing of heavy equipment
PT Andalan Multi Kencana 2010 100 Spare parts sales
PT Komatsu Remanufacturing Asia 1997 49 Remanufacturing of heavy equipment
PT Harmoni Mitra Utama 2008 35 Logistics
PT Komatsu Indonesia 1982 5 Production of Komatsu heavy equipment
Mining and mine contracting
PT United Tractors Semen Gresik 1992 45 Contractor for quarrying and limestone
PT Tuah Turangga Agung 2008 100 Coal mining concession
PT United Tractors’ business activities are focused on the two areas: construction machinery and
mining contracting. United Tractors is also involved in trading, coal mining, manufacturing
201
construction equipment and materials handling equipment and heavy equipment sales and rental.
These are its principal subsidiaries and affiliates.
Turnover
Table 174. PT United Tractors: Revenue and Net Profit, 2007-2011

(Rp Billion)
2007 2008 2009 2010 2011

Revenue 18,166 27,903 29,242 37,324 55,053
– Of which: Construction Equipment 8,702 12,361 10,994 17,281 27,196
Net Income 1,493 2,661 3,818 3,873 5,901
Source: Company Reports
The increase in net revenue has been spectacular over the last seven years with turnover
increasing from Rp13 billion in 2005 to nearly Rp30 billion in 2009 and then almost doubling in
only two years.
The finances of the company are explained in greater detail in its annual and quarterly reports. In
2011 the company recorded a 47.5 per cent jump in profits to Rp55.05 trillion, a 50.05 per cent
rise in gross profit to Rp10.19 trillion and a 52.4 per cent rise in net profit to Rp5.90 trillion. The
rise in consolidated revenue was achieved thanks to a sharp rise in Komatsu heavy equipment
sales volume, increased coal production, increased volumes of overburden removal and increased
coal sales.
Personnel: 23,219 in total, of whom 4,604 are employed in the construction machinery unit.
There are 40 per cent more employees working in construction equipment in 2011 than in 2009.
Franchises
Table 175. PT United Tractors: Range of Franchises, 2012
Company Franchise
Komatsu Construction equipment, forklift trucks and forestry
Bomag Compaction equipment
Tadano Mobile cranes
UD Trucks On-road trucks
Scania On-road trucks, buses
Kubota Agricultural tractors

202
United Tractors has slimmed down the number of companies it represents, concentrating on the
Komatsu brand, which has grown so substantially and now requires maximum management and
administrative attention.
The subsidiary PT Bina Pertiwi is the home of the Komatsu mini excavator product line,
industrial fork lift trucks and the Kubota agricultural tractors.
Outlets
Branch Operations Mining Operations

 Jakarta  Muara Tewe
 Surabaya  Bontang
 Bandar Lampung  Adaro Tanjung
 Jambi  Batu Kajang
 Padang  Senakin
 Pekanbaru  Satui – Sungai Danan
 Medan  Soroako
 Balikpapan  Sangatta
 Samarinda  Tanjung Redeb
 Banjarmasin  Binungan
 Pontianak  Bendi-Li
 Tarakan  Kati
 Palu  Sambarata
 Makassar  Tenggarong
 Manado  Freeport
 Sorong  Timika
 Jayapura
After sales services are available to all customers through nationwide network that encompasses
18 branch offices, 17 site-support offices and 12 representative offices (not shown above).
The centre of operations is the 8.5 hectare facility in Jakarta Cakung, which houses the head
office, extensive spare parts stores and training centre. The facility has up to 100,000 parts
available at any one time. Given that 70 per cent of sales go to the mining sector, it is logical
that the company supports a large structure of mining support sites, as listed above.
Complementing them are the branch operations shown.
Supporting the construction equipment division is a 49 per cent UT-owned remanufacturing

capability known as Komatsu Remanufacturing Asia, located not far from the main coal fields in
203
Balikpapan in East Kalimantan. Its capacity for remanufacturing is 600 machines and 2,300
components per year. In 2007 a second facility was set up in Balikpapan, expanding the factory
from 7.5 hectares to 17.8 hectares.
In that year it also established two new remanufacturing facilities in the Balikpapan and Jakarta
branch offices, following the first one in Pekanbaru branch office, which was set up in 2006.
The three facilities have a capacity of 578 engines and 1,632 component units. In 2009 it added
a facility at Sangatta branch and created new production facilities, in the form of cylinder rebuild
in Balikpapan (70 components per month) and electric component units such as wheel motors
and alternators in Sangatta (30 components per month) and turbo balancer and starting motor test
bench facilities in Jakarta. In 2011, the five facilities were grouped into a new subsidiary
Universal Tekno Reksajaya.
Sales
Table 176. PT United Tractors: Sales of Construction Equipment, 2007-2011

(Units)
2007 2008 2009 2010 2011

Mini Excavators - 2 6 17 13
Crawler Dozers 700 1,060 631 1,300 2,000
Crawler Loaders 5 7 2 - -
Backhoe Loaders 15 15 10 - -
Articulated Dump Trucks 12 50 13 24 128
Motor Graders 199 284 183 355 544
Total 3,109 4,866 3,567 5,762 8,965
United Tractors accounts for about one third of the entire construction equipment market. In the
mining and heavy equipment sector, Komatsu accounts for more than 40 per cent of sales. This
is mainly because of the commanding position of United Tractors’ contracting division, which in
some months takes as much as 50 per cent of the shipments of heavy equipment such as crawler
dozers, large excavators (30 tonnes and above) and dump trucks. It is the market leader in
hydraulic excavators, crawler dozers, rigid dump trucks, motor graders and wheeled loaders.
204
Future Developments: The problems for United Tractors have been ones of continuing success.
A large measure of that success has been created by the mining contracting division, now
accounting for 40 per cent of the total business. The contracting division is now the largest
customer for Komatsu equipment. This may create some difficulties with some of the other
contractors and end-users, which see United Tractors as both a supplier and a competitor. In the
light of this situation it is possible that United Tractors may wish to separate the two businesses
entirely, whilst retaining overall control of the highly profitable contracting operation.
205

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Off-Highway Research

THE CONSTRUCTION EQUIPMENT INDUSTRY IN INDONESIA

MANUFACTURER PROFILES PAGE PAGE

© Off-Highway Research. Contents confidential to the Client.

THE CONSTRUCTION EQUIPMENT INDUSTRY IN INDONESIA

– Market Size and Trends, 2007-2011

 Address  Product Range

 The final section includes comprehensive profiles of leading suppliers of construction

SUMMARY OF MARKET ANALYSES

Table 1. Indonesia: Sales of Construction Equipment and Agricultural Tractors

2007 2008 2009 2010 2011

* Ride-on types only

Motor Scrapers: Sparse demand with no sales since 2009.

Table 3. Indonesia: Production of Construction Equipment by Type, 2007-2011

2007 2008 2009 2010 2011

Source: Off-Highway Research

Table 4. Indonesia: Population of Construction Equipment and Agricultural Tractors

* Ride-on types only

Table 5. Indonesia: Forecast Sales of Construction Equipment and Agricultural Tractors

2012 2013 2014 2015 2016

* Ride-on types only

POLITICAL AND ECONOMIC HISTORY

Party. In 1974, however, national resentment of continuing inflation, of the dominance of

Recent Political Developments

Recent Economic History

Table 6. Indonesia: Economic Growth by Expenditure Type, 2007-2011

2007 2008 2009 2010 2011

Source: Bank of Indonesia

The Economy by Sector

Table 7. Indonesia: Origins of Gross Domestic Product, 2007-2011

2007 2008 2009 2010 2011

Source: Official Statistics

Table 8. Indonesia: Manufacturing Value Added by Sub-Sector, 2010

Source: Statistics Indonesia

Table 9. Indonesia: Steel Production, 2006-2010

2006 2007 2008 2009 2010

Source: World Steel Association

Table 10. Indonesia: Vehicle Production, 2007-2011

2007 2008 2009 2010 2011

Table 11. Indonesia: Composition of the Labour Force, 2009

Agriculture, Forestry, Hunting and Fishery 43,029

Source: National Labour Force Survey

Table 12. Indonesia: Consumer Price Inflation, 2007-2011

2007 2008 2009 2010 2011

Source: Bank of Indonesia

2007 2008 2009 2010 2011

Source: Bank Indonesia

Table 14. Indonesia: Principal Trading Partners for Imports

2007 2008 2009 2010

Source: Official Statistics

Table 15. Indonesia: Exchange Rates, 2007-2012

Currency July 2007 May 2010 June 2012

Source: The Jakarta Post

Table 16. Indonesia: Population in Main Cities, 2010

Source: Official Statistics

Table 17. Indonesia: Forecast GDP Growth, 2012-2016

2012 2013 2014 2015 2016

Source: Economist Intelligence Unit

Sumatra: Production and processing of natural resources and the nation’s

Copper: Production is not growing but exports are doing well.

Oil Palm Plantation Expansion

CONSTRUCTION, MINING, FORESTRY AND AGRICULTURE

Table 18. Indonesia: Growth in Construction Activity in GDP, 2007-2011

Source: Official Statistics