Indonesia Industrial Gases Market Analysis, Growth, Trend & Insights

The Indonesia Industrial Gases Market Size is experiencing steady growth, driven by increasing demand across industries such as healthcare, electronics, and manufacturing. In 2021, the market was valued at approximately USD 7.30 billion and is expected to grow at a CAGR of 5.1% from 2024 to 2032, potentially reaching around USD 9.87 billion by 2027. This article provides an in-depth analysis of the market, covering key benefits, industry developments, driving and restraining factors, market segmentation, trends, regional insights, and more.

Key Benefits of Industrial Gases in Indonesia

1. Enhancement of Industrial Efficiency: Industrial gases such as oxygen, nitrogen, and hydrogen are integral to processes like metal fabrication, food packaging, and chemical manufacturing, improving operational efficiency.
2. Support for Healthcare Growth: Oxygen and other medical gases play a critical role in hospitals and healthcare facilities, particularly important during periods of healthcare demand surges.
3. Advancement in Electronics and Semiconductor Industries: Specialty gases are essential in manufacturing semiconductors, photovoltaic cells, and LED lights, supporting the growth of Indonesia’s electronics sector.
4. Sustainability and Environmental Benefits: Carbon dioxide and nitrogen are used in renewable energy and environmental applications, aligning with Indonesia's sustainability goals.

Key Industry Developments

• Expansion in Healthcare: With healthcare demands rising, companies are expanding the production of medical gases, a trend accelerated by the COVID-19 pandemic.
• Technological Advancements: New technologies are being implemented in gas production, storage, and distribution to meet the demands of high-purity industrial gases.
• Investment in Renewable Energy: As Indonesia moves towards greener practices, industrial gases play a role in energy production and storage, particularly in hydrogen-based renewable energy initiatives.
• Growth in Infrastructure: The Indonesian government’s investment in infrastructure, including oil and gas pipelines, has increased the demand for gases used in metal fabrication, welding, and cutting.

Driving Factors of the Indonesia Industrial Gases Market

1. Rising Demand in Healthcare: The need for medical gases, especially oxygen, is increasing as healthcare services expand.
2. Growth in the Electronics Industry: Indonesia’s emerging semiconductor and electronics industries require high-purity gases like nitrogen and argon, driving market growth.
3. Infrastructure Development: Government-led infrastructure projects boost the demand for gases used in construction, metalworking, and other heavy industries.
4. Food and Beverage Industry Expansion: The use of gases in food preservation, carbonation, and packaging is increasing with the growth of the food industry.
5. Environmental and Sustainability Initiatives: Government policies promoting cleaner energy sources are spurring demand for hydrogen and carbon dioxide in green applications.

Restraining Factors

• High Production Costs: Producing, storing, and transporting industrial gases is costly, impacting small and medium-sized enterprises.
• Stringent Regulations: Regulatory restrictions on certain gases, particularly those impacting the environment, add operational challenges and costs.
• Dependency on Imports: Indonesia relies on imported technologies for gas purification and storage, which could lead to higher costs and supply-chain disruptions.
• Volatile Prices of Raw Materials: The fluctuating prices of raw materials, such as natural gas, used in industrial gas production may hinder profitability.

Market Segmentation

By Gas Type

1. Oxygen: Widely used in healthcare, steel production, and environmental applications.
2. Nitrogen: Essential in food packaging, electronics manufacturing, and inerting processes.
3. Carbon Dioxide: Used in beverages, environmental applications, and metal fabrication.
4. Hydrogen: Emerging as a key gas in renewable energy and refining applications.
5. Argon: Used in welding and steel manufacturing for its inert properties.
6. Other Specialty Gases: Includes helium, acetylene, and neon, utilized in niche applications like electronics and scientific research.

By End-Use Industry

1. Healthcare: Driven by increasing demand for oxygen and other medical gases.
2. Electronics: Specialty gases support semiconductor and LED manufacturing.
3. Food and Beverage: Growing use of gases for preservation and carbonation.
4. Manufacturing and Metal Fabrication: Uses gases in welding, cutting, and metal processing.
5. Energy and Power: Hydrogen and other gases are used in renewable energy and fuel applications.
6. Chemical Industry: Relies on industrial gases for synthesis, refining, and other chemical processes.

Market Outlook

The Indonesia industrial gases market has a positive growth outlook, driven by increased demand across sectors like healthcare, electronics, and manufacturing. Government-led infrastructure projects and the expansion of renewable energy sources will contribute to steady growth. As Indonesia pursues its sustainability goals, the demand for hydrogen and other green gases is anticipated to rise significantly.

Market Overview

Indonesia’s industrial gases market is diverse, covering oxygen, nitrogen, hydrogen, and specialty gases, each critical to the operations of major industries. The healthcare sector, particularly with the growth of medical facilities, is a primary contributor to demand, while electronic manufacturing is rising as well. The market is competitive, with both domestic and international players vying for a share. Additionally, the trend towards localizing production to mitigate import dependency may reshape market dynamics.

Trends in the Industrial Gases Market

1. Focus on Clean Energy: The Indonesian government’s focus on clean energy has fueled demand for hydrogen in energy storage and power generation.
2. Growth in E-Commerce and Cold Storage: The e-commerce boom has increased demand for gases in packaging and refrigeration.
3. Technological Innovations: Companies are adopting advanced technologies for efficient gas storage, purification, and delivery, enhancing operational efficiency.
4. Increasing Local Production: Domestic companies are expanding production capabilities to reduce dependency on imports and improve supply chain stability.

Regional Analysis/Insights

Indonesia’s industrial gases market is concentrated in regions with high industrial activity, such as Jakarta, Surabaya, and Medan. The demand is highest in urban and industrial areas due to healthcare facilities, electronic manufacturing, and infrastructure projects. The government’s infrastructure push and the rise of industrial parks further boost demand in these regions.

Top Impacting Factors

1. Government Policies on Clean Energy: Regulations favouring renewable energy increase the demand for hydrogen and other sustainable gases.
2. Healthcare Sector Growth: Expansion in healthcare facilities increases demand for medical gases.
3. Technological Advancements: Innovations in gas storage and delivery systems drive market growth.
4. Rising Food Processing Industry: Food-grade gases are increasingly used in packaging and preservation as the food industry expands.

Target Audience

The target audience for the Indonesia industrial gases market includes healthcare providers, electronics manufacturers, food and beverage producers, energy companies, construction firms, and government entities focused on infrastructure and sustainability.

Major Key Players

1. L’Air Liquide S.A. (Air Liquide)
2. Linde plc
3. Pt. Tira Austenite Tbk
4. PT Aneka Gas Industri Tbk
5. Air Products and Chemicals, Inc.
6. Others

These players dominate the market, offering a wide range of industrial gases and related services.

Opportunities

• Expansion into Renewable Energy: The use of hydrogen as an alternative fuel source offers significant opportunities.
• Medical Sector Growth: With rising healthcare demand, companies can capitalize on producing high-quality medical gases.
• Partnerships with Local Manufacturers: Collaborating with local firms can help reduce costs and secure a steady supply chain.
• Cold Chain Logistics: Growth in the food and beverage industry opens avenues for gases used in refrigeration and cold storage.

Challenges

• High Production Costs: The expenses associated with gas production, storage, and transportation are substantial.
• Supply Chain Disruptions: Indonesia’s reliance on imported equipment can lead to bottlenecks in the supply chain.
• Environmental Regulations: Stricter environmental policies can limit the production and use of certain gases.

Restraints

• Dependency on Imports: Heavy reliance on imported gas technologies and raw materials makes the industry vulnerable to global supply chain fluctuations.
• Stringent Safety Standards: Safety regulations increase operational costs, especially for small players.