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Indonesian Tile Makers Riding on the Property Boom

Number of visits: Date:2017-05-20 12:00

Few businesses benefit from Indonesia's property boom as much as tile makers. While there are growing concerns that the quick increase in asking prices in Jakarta and Bali could be a bubble waiting to burst, the tile industry has little to lose as long as nationwide demand for real estate continues to grow. Indonesia already makes the global top ten in both production and consumption of ceramic tiles; and the country harbours a lot more potential as the population grows, urbanization continues and incomes rise. This has not been lost on tile exporters around the globe, though they face strong competition from local producers. The Indonesian Ceramic Industry Association (ASAKI) has set its sights on turning Indonesia into a regional hub for the ceramic industry.

Currently, per capita ceramics consumption is still low in Indonesia at less than 2 square metres (m2) a year, which compares to more than 3 m2 in both Malaysia and Thailand.

For now, Jakarta and its surroundings remains the centre of building activity in Indonesia due to the influx of people into the area (See Mass Housing Plan Spells Massive Opportunity). But other urban areas, such as Surabaya in East Java, are already beginning to steal the show, and their importance for the construction industry is set to rise over the coming years and decades. The Asia Construction Outlook 2014 from AECOM Capital rates Indonesia as the country with the greatest mid-term growth potential for residential construction spending.

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