INDONESIA HEAVY & ROAD CONSTRUCTION EQUIPMENT

Jakarta, 3 October 2023

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MAIN DRIVERS & CHALLENGES
AGRO SECTOR
Palm Oil and CPO Industry Highlight :
• Prospect for CPO industry is still good, however, there will be potential challenges due to global economic slowdown and
substitution from other edible oil.
• CPO price is projected to be in relatively stable at average USD 800 – 900/ton level by end of 2023.
• Indonesian CPO production, export, and domestic consumption is projected to be increase throughout 2023

CPO Price CPO Statistics

(million ton)
(USD/ton)
1.800
YTD Jun-23 3,69 27,30 16,31 11,08
1.600
PROJECTION 2023: YTD Jun-22 23,50 12,04
1.400 USD 800 – 900/ton 9,73
6,69
1.200
2023F 3,60 51,00 30,00 21,00
1.000
2022 3,66 51,25 30,80 20,96
800
2021 4,13 51,30 33,67 18,36
600
2020 4,86 51,57 34,00 17,30
400
2019 4,59 51,82 36,17 14,32
200
2018 3,26 47,38 34,71 13,43
0
2017 4,02 41,98 32,18 9,53
2-Nov-19

2-Apr-20
2-Jan-19

2-Jun-19

2-Oct-22

2-Mar-23

2-Aug-23
2-Jul-21
2-Sep-20

2-Feb-21

2-May-22
2-Dec-21

2016 3,75 35,57 26,57 8,37

Export Domestic Production Stock

Source : GAPKI News, MPOB

MAIN DRIVERS & CHALLENGES
FORESTRY SECTOR

Pulp & Paper Industry Highlight :

• Prospect for pulp and paper industry is also challenging due to global economic slowdown.
• Pulp price will remain volatile driven by global ucertainties, and also by slowing demand in developed countries and China.
• Meanwhile, Indonesian wood and pulp production is projected to grow slightly in 2023.

Pulp Price Pulp & Wood-pulp Production

(BHKP China - USD/ton) (million ton)
1.600

1.400

1.200 PROJECTION 2023:

USD 900 – 1.000/ton 37,4 38,4 39,0
1.000 36,0
34,4
31,3 31,7 32,35
800
23,85 24,86
600

400
8,18 8,67 8,8 9
6,42 6,47 6,81 7,28
200 5,52 5,64

0
May-19
Jul-19
Sep-19

May-20
Jul-20
Sep-20

May-21
Jul-21
Sep-21

May-22
Jul-22
Sep-22

May-23
Jul-23
Mar-19

Mar-20

Nov-20

Mar-21

Mar-22

Mar-23
Nov-19

Nov-21

Nov-22
Jan-20

Jan-21

Jan-22

Jan-23 2016 2017 2018 2019 2020 2021 2022 2023F YTD YTD
Jul-22 Jul-23

Pulp Wood-pulp

Source : FOEX – RISI; Norexco; Investing.com

MAIN DRIVERS & CHALLENGES
CONSTRUCTION SECTOR

Infrastructure Industry Highlight :

• Infrastructure development is still expected to be accelerated throughout 2023
• Government infrastructure budget absorption and PSN projects development can be potentially lower than target in 2023.

Government Infrastructure Budget Government Key Infrastructure Projects

(IDR Trillion) PSN Progress Update
(Total 200 PSN projects; 2015 - 2024)
425 417
410 402
392 394 392
366 363,8

281
261,6 104
16 53%
8%

30
78,5 15%
24 24
12% 12%

2018 2019 2020 2021 2022 2023F

*absorption
as of April 2023 Completed in 2015-2020
Budget Absorption Completed in 2021
Completed in 2022
Target 2023
Source : Nota Keuangan APBN 2023, Ministry of Finance Target 2024
MAIN DRIVERS & CHALLENGES
MINING SECTOR

Thermal Coal Mining Industry Highlight :

• Prospect for thermal coal market is now challenging due to decreasing price driven by global economic slowdown and
oversupply in producer countries.
• However, Indonesian coal production will remain high driven by high government target for 2023.
• Indonesian coal price level is projected to get back to 2019 price level equilibrium.

Thermal Coal Price(USD/ton) Indonesian Thermal Coal Mining

GCNI: Global Coal Newcastle Index (in million ton)
ICI: Indonesian Coal Index

500

PROJECTION 2023: 687 694

400
GCNI : USD 110 – 120/ton 615,2 606,2 13,0
561
ICI-2 : USD 70 – 80/ton 528,2 18 38,1 189
300 ICI-4 : USD 50 – 60/ton 23,4
35,2 138,4
133,1 408,2
132,6
115
326,8 30,8
200
16,3 83,7
458,8 485
100 405 435 79,1
378
293,6
231,3
0
Apr-19

Jun-23
Dec-19
Mar-20

Dec-20
Mar-21

Dec-21
Mar-22

Dec-22
Mar-23
Oct-19

Jun-20

Jun-21

Jun-22
Jan-19

Sep-22
Jul-19

Sep-20

Sep-21

2018 2019 2020 2021 2022 2023F YTD YTD

Jul-22 Jul-23

GCNI 6322 GAR ICI 2 5800 GAR ICI 4 4200 GAR Export Domestic Excess Production

Source : ESDM, APBI, Global Coal

MAIN DRIVERS & CHALLENGES
NICKEL MINING SECTOR

Nickel Mining and Smelting Industry Highlight :

• Nickel ore mining and smelter output are projected to increase continuously by 2025.
• However, nickel industry prospect is also affected by decreasing price driven by global economic slowdown.
• Government of Indonesia will push more HPAL smelter to support EV and battery storage system industry rather than stainless steel
industry.

Nickel Ore Production & Smelter Processing Ouput

Nickel Price 225
(USD/ton)
168,7
60.000 140,5

52,9 71,7
50.000 46,7
PROJECTION 2022:
1580,8 1600 1650
Nickel Price 1480
40.000
USD 20.000 – 25.000/ton 1151,7
781 860,5 800 850
30.000 702

72 91,7 82,6 83 85
20.000

2019 2020 2021 2022E 2023F 2025F

10.000

NPI (thousand ton)

NOTE:
0 Fe-Ni (thousand ton)
Total NPI & Fe-Ni production in 2022 and 2023
Jul-19

Jun-20

Jun-21

Jun-22

Jun-23
Apr-19
Jan-19

Sep-19
Dec-19
Mar-20

Sep-20
Dec-20
Mar-21

Sep-21
Dec-21
Mar-22

Sep-22
Dec-22
Mar-23

will be lower than initial projection because a

Ni Matte (thousand ton)
lot of smelter is switching its output to higher-
Nickel Ore (million ton) grade higher-price product, such as MHP,
steel slab, etc..
Source : ESDM, APNI
 INDONESIA HEAVY EQUIPMENT MARKET (1/2)
Hydraulic Excavator, off highway dump truck, bulldozer, motor grader & wheel loader

39%
20293 Market YTD July 2023
11.183 units (-7%)
14567 8915 +3.6%
14%
10459 5239
+4.1% 46%
7238
2270 ?
3654 2080
1349 1635 6725 26%
1269 5810
4378 3500 -9.2%
1078 834 1438 2383

2019 2020 2021 2022 2023F 14%

Agro Construction Forestry Mining +1.6%

• Heavy equipment market in 2023 is predicted to slightly increase due to the high mining sector demand in the first semester.
However, construction market will be challenging facing the 2024 president election.

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Source : ERG Data
 INDONESIA HEAVY EQUIPMENT MARKET (2/2)
Hydraulic Excavator, off highway dump truck, bulldozer, motor grader & wheel loader

Family Model Contribution to Market Heavy Equipment

per YTD July 2023 : 11.183 units

Family Model Contribution Hydraulic Excavator (HEX) Market

YTD July 2023
Hydraulic Excavator 73,1% 1% 1% 7-ton
1%
13-ton
Off Highway Dump Truck 12,0% 6% 7%
20-ton
11%
8,7% 23% 30-ton
Bulldozer
40-ton
Motor grader 2,9% 80-ton
125-ton
Wheel Loader 3,2% 50% 200-ton up

Total 100%

• Hydraulic excavator (HEX) is the most popular model with 73,1% contribution.
• 20-ton class dominates the excavator market with 50% share.

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Source : ERG Data
 INDONESIA ROAD CONSTRUCTION EQUIPMENT MARKET (1/2)
Vibro/Single drum, asphalt finisher, tandem roller, pneumatic tyre roller, cold milling & recycler

Market YTD July 2023

1000 1000
890
900 810 900
800 59% 800 571
700 700 29%
600
560 600 441
500 500
390 ?
400 400
300 300
200 200
100 100
0 0
2019 2020 2021 2022 2023F Ytd July 2022 Ytd July 2023

• Road construction market still growing at the first semester of 2023. Market year-to-date July 2023 increased 29% compared to the
same period last year. However, construction market will be challenging facing the 2024 president election.

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Source : Internal Data
 INDONESIA ROAD CONSTRUCTION EQUIPMENT MARKET (2/2)
Vibro/Single drum, asphalt finisher, tandem roller, pneumatic tyre roller, cold milling & recycler

Family Model Contribution to Market Road Construction

Family Model 2022 YTD Jul 2023

Vibro / Single Drum Roller 90% 92,2% 20 ton class Vibro; 3%

Tandem Roller 6% 3,2%

Tire Roller 2% 2,3%
Paver/Asphalt Finisher 1% 1,1%
Recycler 0.5% 0,7%
10 ton class
Vibro; 97%
Cold Milling 0.5% 0,5%
Total 100%

• Vibro/Single drum rollers contributes 92% of the total market, driven by road infrastructure development, coal and nickel mining
sectors, Palm oil plantation and pulp and paper industry.

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Source : Internal Data
CHALLENGE AND OPPORTUNITY

• Global economic uncertain condition

• Geopolitics dynamic: Russia – Ukraine war, Indonesia
President election
• Chinese economic slowdown
• Commodity thermal coal price declining

• Net Zero Emission (NZE) Challenge

Feasibility study for Electrification Product
• Technology and Application (battery)
• Infrastructure (charging station)
• Business Model (initial investment and parts)

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THANK YOU

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