Raw and processed building materials in Indonesia
Given the growth rate of the construction industry in Indonesia, there is a high demand for building materials, particularly cement. Indonesia's cement producers have boosted their annual production in the past few years. Its largest cement producer, state-owned Semen Indonesia, increased its annual cement production capacity by around 40 percent since 2017. Accordingly, Indonesia ranked as the sixth-largest cement-producing nation in the world in 2021.Indonesia has the world's largest nickel production and reserves, highlighting its importance in the global nickel trade. In 2021, Indonesia produced around 37 percent of the world’s nickel. Simultaneously, global demand for steel products – where most of the nickel production goes – keeps rising every year. Indonesia is currently the world's largest stainless-steel exporter. With 3.72 billion U.S. dollars’ worth of stainless-steel ingots exports in 2021, this metal is also one of Indonesia’s most in-demand export products.
Apart from nickel, Indonesia also has an abundance of copper and is currently the world’s ninth-largest copper producer. The Grasberg mine in Papua is the second-largest copper mine in the world. It is operated by PT Freeport Indonesia and has a production capacity of 700 thousand metric tons annually. It has one of the largest reserves of copper globally, with recovery rates over 89 percent. After the Indonesian government acquired most of PT Freeport Indonesia's shares in 2018, the company was required to build a second smelter following Indonesia's mining regulations, which demand that mineral ores be processed domestically. The new facility is anticipated to start operations in early 2024 and will produce 1.7 million metric tons of copper concentrate annually.
Moreover, Indonesia is one of the world's largest producers of timber. It also exports a wide variety of timber products widely used for construction purposes, such as plywood and veneer. Indonesia's wood manufacturing sector is among its largest sector of employment.
