The process instrumentation market in Indonesia is projected to expand from US$ 181.70 million in 2021 to US$ 266.06 million by 2028, reflecting a compound annual growth rate (CAGR) of 5.6% during this period.
Process instrumentation plays a crucial role in monitoring, simulating, analyzing, and regulating manufacturing processes. These instruments take timely measurements of vital process parameters, aiming to enhance both safety and quality in operations.
In Indonesia, there is a significant demand for petrochemicals, especially fertilizers and plastics. The government is keen on reducing the country's dependence on imported petrochemicals by bolstering the domestic industry to satisfy the increasing demand. This presents numerous investment opportunities within Indonesia's petrochemical sector. Notably, in 2018, Indonesia ranked among the top exporters of liquefied natural gas (LNG), alongside countries like Qatar, Australia, Nigeria, Malaysia, the United States, and Russia. The steady rise in domestic demand for petrochemicals has led to substantial imports, particularly in commodity petrochemicals such as polyethylene and polypropylene, which are essential for bridging the domestic supply gap.
Process and analytical instruments, including analyzers and monitors, are vital across various sectors such as oil and gas, chemicals, pharmaceuticals, semiconductors, and factory automation. These instruments ensure safe plant operations by detecting out-of-tolerance conditions and automatically shutting down units to prevent hazardous situations. The instrumentation used in the oil and gas sector encompasses sensors, signal transmitters, controllers, indicators and alarms, actuated valves, logic circuits, and operator interfaces. Various types of instruments are essential for measuring levels, flow, pressure, and temperature.
The oil and gas industry is the dominant force in the Indonesian process instrumentation market, driven by a persistent demand for safety and reliability. However, the energy and power sector is anticipated to gain a larger market share in the coming years, fueled by the increasing need for cleaner, smarter energy solutions and renewable energy sources.
The surge in demand for process instrumentation is primarily attributed to the necessity for accurate instruments that enable industrial users to operate processes effectively, efficiently, economically, and safely. The growing need for these products across diverse industrial sectors with critical measurement requirements is propelling the growth of the Indonesian process instrumentation market. Additionally, various instruments such as flow meters, level meters, and analytical devices are being developed to offer high durability, ease of installation, and safety features tailored to specific applications. These advanced devices are designed to function optimally in harsh environments, further contributing to market growth.
Key stakeholders in the Indonesian process instrumentation market ecosystem include manufacturers of instruments and components, as well as end users. The demand for process instrumentation is driven by manufacturers' focus on cost-saving measures, technological advancements, and the increasing need for precision, energy efficiency, repeatability, reliability, and enhanced capacity.
Leading manufacturers in the Indonesian process instrumentation market include PT KROHNE Indonesia, PT Yokogawa Indonesia, Supmea Indonesia, PT Parker Hannifin Indonesia, and PT Epiroc Southern Asia. The growth of the Indonesian process instrumentation market is influenced by both organic and inorganic developments from these manufacturers. For example, in 2019, KROHNE and SAMSON formed a partnership and launched their joint venture, FOCUS-ON, which introduced the FOCUS-1 prototype, an intelligent process node specifically designed for the process industries.
Process instrumentation encompasses a range of components, including sensors, analog signal processing circuits, analog-to-digital converters, and digital processors. The oil and gas sector remains the primary end user of process instrumentation in Indonesia. The increasing adoption of these instruments by various industrial sectors to ensure quality and enhance efficiency has significantly boosted demand.
From a technological perspective, the Indonesian process instrumentation market is categorized into flow meters, pressure and temperature instruments, analytical instruments, and level meters. In 2020, the flow meter segment led the market and is expected to maintain its dominance throughout the forecast period. Additionally, the analytical instrument segment is projected to experience the fastest growth rate during this time.
Key players profiled in this research include Epiroc Group, Supmea Automation, Yokogawa Electric, Krohne Group, and Parker Hannifin.
Impact of COVID-19 Pandemic on the Indonesian Process Instrumentation Market
The COVID-19 pandemic has posed significant challenges for stakeholders in Indonesia's oil and gas industry, mirroring global trends. The pandemic has led to a notable decline in energy demand and hydrocarbon prices, exacerbating the already volatile landscape of the oil and gas sector. In 2020, Indonesia experienced a surge in COVID-19 cases, which disrupted construction activities in the oil and gas sector and negatively impacted the demand for process instrumentation during the early months of the year. The industry faced a third price crash in 2021, following previous downturns. Although the sector began to recover after the initial shocks, many oil and gas facilities reduced their operations, including halting construction and maintenance projects due to state-imposed "stay at home" orders aimed at curbing the virus's spread.
In response to the pandemic, the Indonesian government, through the Directorate General of Oil and Gas (DGoG), issued several directives to oil and gas companies to mitigate the spread of COVID-19 within the sector.