Industry Investment May Drive Indonesias Demand

In this years first nine months, Indonesia saw domestic and foreign investments in its industrial sector increase from the same period of 2015 by 20 percent and 50 percent, respectively. Some suppliers expect this to stoke continued growth in local demand for industrial lubricants.

The market potential is very large for industrial lubricants,Pertamina Lubricants Corporate Secretary Arya Dwi Paramita told Lube Report Asia.

Currently, Indonesias per-capita demand for all lubricants lags behind that of its neighbors. The lubes subsidiary of state-owned Pertamina found that Indonesias demand for lubricants was 2.7 kilogram per capita in 2016 - much lower than Malaysias 8 kg per capita and Thailands 8.7 kg per capita.

But through September, domestic investment in the economys industrial sector reached 75.4 trillion Rupiahs (U.S. $5.6 billion), up 19.6 percent over the same period last year, according to a Dec. 22 press release from the Ministry of Industry. Foreign investment in industry reached U.S. $13 billion, up 53.6 percent over the same period of the previous year.

Photo: Fotolia / sibfilm

Domestic lube supplier PT Federal Karyatama said the countrys automotive lubricant segment is growing impressively as well, with growth of up to 4 percent across motorcycles, four-wheel passenger cars and light trucks. FKT has grabbed some market share from that increase, Patrick Adhiatmadja, CEO of FKT told Lube Report Asia.

Pertamina Lubricants said it has a 60 percent share of the domestic lubricant market, with clients in mining, energy, steel, tin, food and beverage and other industries.