We use cookies to give you the best possible experience on our website. By continuing to browse this site or by choosing to close this message, you give consent for cookies to be used. For more details please read our Cookie Policy.

Exciting time for Indonesian construction

Indonesia could benefit when it comes to making the most of its urban potential by looking to Singapore's experience in the area, according to a new report. The nation would also see success from encouraging more foreign companies to work in the area. 

Goldman Sachs' latest report looks at the ways in which Indonesia could reinvent its urban planning policies to totally transform Greater Jakarta. With findings that could see a huge boost to the construction within the industry and create a range of opportunities for international trade, the report suggests a $70 billion (£4.4 billion) to $90 billion scheme that would turn Jakarta into a global city in up to 20 years.

The report suggests that using Singapore's experiences to create planning policies could lead to better and faster results than Indonesia attempting to create its own policies from scratch. Best practice from Singapore could help work as a guide to how best to move forward with Jakarta's development.

In particular, the report suggests that Indonesia could benefit from areas such as the Singapore's creation of affordable mixed-use neighbourhoods, which could be the way to go for creating low-cost housing in Jakarta. This would be hugely beneficial to improving quality of life as well as the city as a whole.

Taking inspiration from Singapore's policies could help to further work already being done, such as One Million Houses Programme, which aims to construct one million homes this year and a total of ten million properties for low-income families by 2019.


Use of foreign companies is key

Part of the reason why Singapore is seen as such a positive example for the construction industry is that it attracts a large number of overseas firms and investors. In particular, companies from the UK have benefitted from the large numbers of British expats working in Singapore. Among these, construction is the second-most popular job.

Singapore has responded by increasingly creating a more positive atmosphere for these expats, knowing that it boosts the building industry. Research from Natwest has shown that Singapore is now the number one country for expat quality of life, rising from number ten in 2012.

This has allowed Singapore to construct a number of impressive buildings thanks to foreign firms, particularly from the UK. For example, London-based company Gustafson Porter has created the Marina One building, which incorporates an elevated biodiversity garden in between four high-rise towers.


A construction boom

This comes at a time when Indonesia's construction industry continues to boom. This can be seen in the cement production sector, which saw a significant rise in sales last month. Figures published by the Indonesian Cement Association reveal that domestic sales in the country rose by 13 per cent year-on-year in August.

This has been attributed to a sharp rise in demand for both infrastructure and housing construction, according to the association, which predicts the trend to continue in the months ahead.

Overall, sales rose to 5.3 million metric tons of cement in August, compared to 4.7 million in the same period last year. Before the rise, tepid demand from the construction sector had seen sales decline slightly, though an industry-wide boost in sentiment has turned this around, explained Widodo Santoso, chairman of the Indonesian Cement Association.

"The increase indicates that construction of infrastructure, housing and apartment is moving ahead, with the government starting to disburse their budget for the project," he explained. In the January-August period, he noted that cement sales by volume had reached 37 million tonnes, which keeps pace with figures registered last year, although the recent spike could ultimately see 2014's figures eclipsed this year.
Mr Widodo predicted that cement sales will continue to gain momentum, paralleling the government's intention to disburse the infrastructure budget. Across the nation, demand in Sulawesi, Sumatra, Kalimantan, Nusa Tenggara and Java are all set to be boosted, with rising national household demand having a direct impact on the country's wider economy.

Related Events

Get in Touch

Want news like this in your inbox?