Indonesia’s electrifying utilities industry brightens growth

The utilities industry consists of three main markets, electricity, gas and water. The electricity market proved to be the most lucrative utilities industry as it dominated 63.55% share of the market. Indonesia is the largest country in Southeast Asia; its main economic activity is agriculture, thus water utilities play an important role in agriculture production. Water consumption in the country is expected to increase to more than 356 billion cubic meters per annum by 2015.

Although water sources in Indonesia account for 21% of total water resources in Asia Pacific, lack of clean water is becoming a serious problem in Indonesia. Nearly half of the population in Indonesia lacks access to safe water and more than 70% of the 220 million person population rely on water sources that are deemed potentially contaminated. To achieve the Millennium Development Goals (MDGs), the Indonesian government needs to improve water supply and sanitation services.

For energy sources, PT Perusahaan Listrik Negara (PLN) has the sole right to produce and distribute electricity throughout Indonesia. The demand for electricity is projected to grow at more than 8% per year until 2020. Meanwhile, Indonesia has a proven natural gas reserve of 3.0 trillion cubic meters. Perusahaan Gas Negara (PGN) is the market leader in both transmission and distribution businesses in Indonesia.

 Key Findings

• Demand for electricity in Indonesia is projected to grow at a pace of more than 8% per year until      2020.
• By the end of 2011, PLN had a total installed generation capacity of 29,268 MW, an increase of 8.8% over the previous year. Remarkably, the growth rate in 2011 was the highest it has been in the last five years.
• Indonesia plans to more than triple the share of new and renewable energy to the total national primary energy mix by 2025.

Electricity Supply in Indonesia

Source: CEIC

This is just a quick glimpse into the EMD Report: Indonesia Utilities Sector. Learn more and purchase now>>

 

Vietnam’s steel industry badly hit by depressing global economy

2011 saw unpredictable happenings of the European sovereign debt crisis depressing the global economy. In Vietnam, unstable macroeconomic conditions and negative impacts of the global economy caused domestic companies to fall into bad situations and brought many of them into the verge of bankruptcy.

Vietnam’s steel industry was affected by the negative effects of the following factors: increase in the cost of raw materials and the exchange rate caused the production cost to go up; tight monetary policy and reduction of public investment caused the demand to drop and selling prices to remain stagnant; and high interest rate and declining stock market led to higher interest expenses.

Vietnam is the third-largest steel consuming country in ASEAN with a demand of 9.70mn tonnes in 2011, down 8.3% y/y.

Key Findings 

• Vietnam’s steel consumption declined 8.3% y/y to 9.70mn tonnes in 2011. As steel demand shrinks and stock increases, the VSA predicts that the steel industry might fail to raise production by 3–4% in 2012. 
• Lower consumption, higher inventories and rigid competition from low-priced Chinese imports forced several steel companies to cut their prices and operate below full capacity.
• Steel exports made good progress in 2011 with a significant increase of 52.2% y/y to 2.07mn tonnes, mainly attributed to export promotion schemes and attractive prices.

                                       Source: SEAISI

Much more in the Emerging Markets Direct report: Vietnam Steel Industry 1H12