Summary

The Prefabricated Building Market in Indonesia is expected to grow at a CAGR of approximately 4.5% during the forecast period mainly driven by the demand for low- to – mid-rise residential buildings, project homes, and public housing.

With the rapid increase in the population in Indonesia, the need for low-cost housing has become essential. The Ministry of Public Works and Housing through the Directorate General of Housing Finance estimates that by 2025 the number of housing needs in Indonesia will reach 30 million units. High demand in housing pushed the Indonesian government to implement the large scale of the housing recovery program, making conventional construction method is no longer efficient in fulfilling the needs of hundreds and even thousands of post-disaster housing. In the occurrence of any natural disasters such as Tsunamis that are rampant in the area, which leads to homelessness, the immediate demand is for housing and shelter that morphs into housing over several weeks. The recovery program must be carried out in a less time span to settle back to the affected community. Since the conventional construction method is considered inefficient to comply with the needs for large scale reconstruction, one of the alternatives to encounter time constraint on the reconstruction process is prefab architecture. In regards to that, as part of the rehabilitation process of the earthquake that hit Lombok in 2018, Indonesian government has budgeted IDR 50 million for each head of household whose house have been severely damaged to rebuild their houses with RISHA (Healthy, Modest, Instantaneous House). It is a modular prefabrication with knock-down concept that combines precast concrete panels with bolts.

In Owing to such factors, the Ministry of PUPR has used precast technology in various infrastructures built, including RISHA (Simple Healthy Instant Houses), flats, post-disaster temporary school reconstruction, as well as road and bridge construction, as well as building primary and secondary irrigation networks which makes the prefab construction industry in Indonesia a sellable point.

Key Market Trends

Upcoming Projects in the Prefab Construction Sector/ Affordable Housing to Boost the Activity and Growth

Modular and prefabricated technology is utilized to pursue practicality in work, as well as the speed of project development. However, this method is also recognized to be able to improve the quality of buildings with qualified standardization and has a higher level of precision compared to conventional projects. Not surprisingly, some developers use this project to present residential projects that can return the value of their investment quickly, even though it is for the middle class. Side affordable becomes one of the points that can be packaged in the use of these technologies. With many projects shaping up soon and with many already being announced in the year 2019/20 in various sectors like residential, retail, civil, community, education, industrial, etc., the prefab sector in Indonesia is set to see rapid growth during the forecast period.

Precast Concrete Holds Largest Share in the Market

Precast concrete holds the largest share in the market driven by the increase in the off-site construction activity. The rapid infrastructure advancement held by the government in the nation has driven the demand for supporting materials such as concrete which is likewise very huge. It is likewise expected to exhibit growth with an increase in non-residential and private development because of rising urbanization. This development can be ascribed to the increasing awareness among manufacturers, designers, constructors, and end-clients with respect to the benefits of utilizing precast concrete.

The precast concrete construction technology is one of the most promising solutions to deal with the rising demand for housing and infrastructure construction. Data from the Indonesian Prefabricated and Prefab Company Association (AP3I), the production capacity of precast concrete is always increasing. In 2015 the national precast concrete production capacity was 25.3 million tons, in 2016 it rose to 26.7 million tons. In 2017 the figure jumped to 35 million tons.

Competitive Landscape

The report covers the major players operating in the Indonesia Prefabricated Buildings Industry. The market is highly competitive with a few players occupying the major share. The market is fragmented, and the market is expected to grow during the forecast period due to the increase in the prefab construction building investments and up-coming major projects in the country and other few factors are driving the market. Prefabricated building systems and construction hold high potential to improve the efficiency and performance of the Indonesian construction industry in a more sustainable sense. In the next 2 years, modular concept buildings are expected to be increasingly popular.

PT Pembangunan Perumahan (Persero) Tbk. or PTPP is one company that is eyeing a new business opportunity. The company has collaborated to develop technology that will be used in the modular business. In fact, the research team has run the development stage with a machine that will be used to have 3D printing technology from Dubai. With the market just opening-up among the building industry generating trust, with investments in the technology -R&D, the market is open to ample opportunities and can witness strong growth in the coming years..

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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