With its population of 250 million and growing personal consumption, Indonesia is expanding both economically and in industrial gas terms. For this reason, it is also the focus of a number of leading players in the Japan gases industry.
Citing a survey made by the Japan External Trade Organisation (JETRO), The Gas Review (TGR) notes that as of March 2014, almost 1500 Japanese companies had ventured into the country. The automotive industry in particular had achieved ‘amazing’ expansion in the country, following the lead of Toyota Motor when it moved into an industrial park in the vicinity of Jakarta around 40 years ago.
It’s understood that Japanese cars currently account for around 90% of the cars on the road in Indonesia, for example.
This is just one of a number of factors driving growth in the Indonesian industrial gases business. The market is estimated to be valued at ¥35bn according to TGR, with domestic producer Samator accounting for around 50% of the market. Industrial gas majors Air Liquide, Air Products and The Linde Group have all penetrated the market, while the trend for Japanese gas companies is increasing.
Iwatani established a local subsidiary – Iwatani Industrial Gas Indonesia – in the country 18 years ago, operating a filling plant for carbon dioxide, ammonia and chlorofluorocarbon mainly for the automotive sector. A medium-size air separation unit (ASU) is currently under construction on the same site, scheduled to go into operation in January 2016. The company will be entering the local market for liquid gas.
Taiyo Nippon Sanso (TNSC) and Air Water have also ventured into the Indonesian market as they seek to expand. February 2014 saw TNSC strike up a joint venture with Samator – Samator Taiyo Nippon Sanso Indonesia – too, constructing a helium filling plant in West Java. The company also plans to construct a filling plant for regular industrial gases and is thought to have its sights set on producing an acetylene alternative based on natural in the future.
Air Water, meanwhile, established Indonesia Air Water in May 2014 and has an office in Jakarta, triggered by the delivery of an on-site gas system by Air Water NV treatment (nitriding) business to an automotive producer. Besides the NV business, Air Water supplies gas products to a wide range of users and industries. Indonesia is the fourth country in Asia that the company has established a presence in, the others being China, the Philippines, and Thailand.
According to TGR, with the economy continuing to grow in Indonesia, ‘the curtain has now risen for the hard fight of Japanese gas producers to get hold of Japanese gas users who are coming in a steady stream’.
The Gas Review, Issue No. 398