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Petrojaya Boral still dominated gypsum board market in Indonesia.



Gypsum gypsum (jĭp`səm), mineral composed of calcium sulfate (calcium, sulfur, and oxygen) with two molecules of water, CaSO4·2H2O. It is the most common sulfate mineral, occurring in many places in a variety of forms.  board has gained wider use in Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago.  as a substitute for plywood plywood, manufactured board composed of an odd number of thin sheets of wood glued together under pressure with grains of the successive layers at right angles. Laminated wood differs from plywood in that the grains of its sheets are parallel. , which is becoming scarce.

Gypsum board market in Indonesia is presently dominated by three main suppliers which are all connected with foreign companies. These suppliers are PT Petrojaya Boral BORAL Boron Aluminum (KBAlloys)
BORAL Bitumen Oil Refineries Australia Limited (now simply known as Boral Limited) 
 Plaster Plaster

A plastic mixture of solids and water which sets to a hard, coherent solid and which is used to line the interiors of buildings. A similar material of different composition, used to line the exteriors of buildings, is known as stucco.
 Board which is jointly owned by two major multinational companies in building materials Building materials used in the construction industry to create .

These categories of materials and products are used by and construction project managers to specify the materials and methods used for .
 i.e. Boral of Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop.  and Lafarge of France. Two other key players are PT Siam Siam: see Thailand.  Indo Gypsum Industry which is connected with Siam Cement The Siam Cement Public Company Ltd. is a large cement company in Thailand. It is listed on the Stock Exchange of Thailand (trading symbol: SCC).

It was founded under the Royal Decree of King Vajiravudh in 1913.
 of Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia.  and Knauf Gypsum Indonesia which is connected with Knauf of Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). .

Gypsum board industry started in Indonesia in 1994, with the operation of the first plasterboard manufacturer, PT Petrojaya Boral Plaster Board in Gresik, East Java East Java (Indonesian: Jawa Timur) is a province of Indonesia. It is located on the eastern part of the island of Java and also includes neighboring Madura and Bawean islands.  previously a joint venture between PT Petrokimia Gresik, Pembangunan Jaya and Boral of Australia. Later in 1998 the Australian partner took over the whole share and in 2000, some of the shares are acquisitioned by Lafarge of France.

At present PT Petrojaya Boral Plasterboard is the largest gypsum plasterboard manufacturer in Indonesia with a total production capacity of 36,250,000 sq.m a year. The company operates three factories.

The first factory is located in Gresik for Plaster board and ceiling tile tile, one of the ceramic products used in building, to which group brick and terra-cotta also belong. The term designates the finished baked clay—the material of a wide variety of units used in architecture and engineering, such as wall slabs or blocks, floor , the second in Cilegon for plaster board and compound and the third in Sunter Jakarta to produce steel frames and accessories.

Other major gypsum board producers are PT Siam Indo Gypsum Industry--SIGI (Elephant elephant, largest living land mammal, found in tropical regions of Africa and Asia. Elephants have massive bodies and heads, thick, pillarlike legs, and broad, short padded feet, with toes bearing heavy, hooflike nails.  brand) and PT Knauf Gypsum Indonesia (Knauf brand). PT Siam Indo Gypsum Industry is a joint venture between Wings group of Indonesia and the Siam-Fibre Co. Ltd./Siam Cement cement, binding material used in construction and engineering, often called hydraulic cement, typically made by heating a mixture of limestone and clay until it almost fuses and then grinding it to a fine powder.  of Thailand. Located in Cibitung, Bekasi, its factory has production capacity of 20.0 million sq.m gypsum board and 12,000 tons gypsum plasters plasters,
n.pl cloth dressings saturated with medicinal substances, placed over skin for rubefacient or analgesic treatments.
 for domestic market, whereas Star brand gypsum board and Elephant brand gypsum plasters are for overseas market.

In addition to the above three major companies there is another company, PT Top Well Indoceil operates a small gypsum board manufacturing plant in East Java with a production capacity of only 126,000 sq.m a year.

By using simple production equipment, the company focuses their market in Surabaya and surrounding sur·round  
tr.v. sur·round·ed, sur·round·ing, sur·rounds
1. To extend on all sides of simultaneously; encircle.

2. To enclose or confine on all sides so as to bar escape or outside communication.

n.
 areas.

The Ministry of Industry also recorder three other companies producing gypsum board i.e. PT Thai Gypsum Surya Indonesia, PT Ikad Kedaung Aneka Gypsum and PT Indalex. However, our checking revealed that the three companies have no longer active. PT Ikad Kedaung closed down the factory following the collapse of its factory due to landslides.

The study has also identified that a new company, PT Aplus Pacific is planning to build gypsum plaster board plant with a production capacity larger than PT Petrojaya Boral. This company presently produces gypsum compound and imports plaster board from Thailand and sells the products under "Aplus" brand in the local market which are lower in price. According to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 a marketing staff of Jaya Board, PT Aplus Pacific is considered to be a potential strong competitor as the company set their price much lower than other suppliers.

Product ranges

Most of existing producers of gypsum board offer a wide ranges of products in term of thickness, pattern, and products for specific application like for wet area, high level of sound proof, fire resistant, round etc. These producers also offer gypsum compound and supporting accessories.

Of the three companies only PT Petrojaya Boral which has its own facilities to fabricate steel frame and other metal accessories like metal stude & u runner, tee, wall angle, hanger etc. This company gets the supply of the raw materials (galvalume) mostly from PT BlueScope Indonesia. Other companies are either import the equipment from its principals or they cooperate with existing roll former to provide supporting accessories for their products.

PT Petrojaya Boral is leading in terms of products ranges, as the company offers "full system" products. Its does not only focus on selling panel but the selling the whole system for ceiling, partition/walling. Sale of system is backed up by technical guarantee from the company which is supported by its principals, Boral and Lafarge.

Pricing

Price competition is quite strong particularly in residential market, as this segment consider price as the most important buying criteria. In the commercial market however, the influence of price is not that strong, as users have greater concerns with the product quality and performances. Therefore, Petrojaya Boral products which are more expensive than other brands are still able to capture significant share in commercial market, because they offer high quality products with integrated services In computer networking, IntServ or integrated services is an architecture that specifies the elements to guarantee quality of service (QoS) on networks. IntServ can for example be used to allow video and sound to reach the receiver without interruption. .

As indicated by the following table the price of Jayaboard is 20-25% higher compared with Elephant brand (Siam Indo) and Knauf. According to an executive of Jayaboard, the company set the price at higher level because they offer integrated services to guarantee that their products and installation meet the need of their clients. Jayaboard is price leader in the market, and their competitors usually set their price at 9-10% lower than Jayaboard.

The price paid by distributor to factory is usually less 5-6% of the distributor price. For instance, the distributor/depo of Petrojaya paid Rp 46,750 to Petrojaya for one sheet of panel of 9 mm thickness. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified"
meantime, meanwhile
, the factory price of 12 mm panel is Rp 54,650 per sheet.

Distribution system

The three major market player of gypsum board sell their products through distributors. All of them do not handle direct sale. Although they have a section/team for serving "project" market segment, but the implementation of transaction is made between distributor and buyers.

All major players don't have sole distributor, but they appoint several distributor to market their products throughout Indonesia. PT Siam Indo Gypsum Industry for instance appoint two main distributors i.e. PT Sayap Mas Utama to distribute their products in the western part of Indonesia. The main distributor, then appoint sub distributors in various cities throughout Indonesia. For instance, in West Java they have 11, East java 11 and Jakarta 4.

PT Petrojaya Boral applies slightly different distribution system. This company has 7 regional office led by a regional manager who will supervise the distribution of their products in their region. A regional office is authorized to develop activities to promote and expand their market operation. In addition to regional manager, the team of regional office also includes marketing staffs, sales engineers/ architects and trainers. A Regional office supervise several "Depo" and special gypsum shop or "Toko". The "Toko" were developed by Petrojaya just a few years ago, to increase their share in the retail market.

To expand the networks of "Toko", Petrojaya provides financuial assistance to rent the building for Toko for one year. However, the Toko owner should have a 3 years rental contract, and they have to pay the remaining two years of rental by themselves. Petrojaya set a sales target for each Toko and at the same time gives point rewards to Took owner if they achieve the target. Currently Petrojaya has 27 Depot's and 68 Toko's throughout Indonesia. Toko Jayaboard is eligible to sell only Petrojaya Boral's products.

Concluding Summary

PT Petrojaya Boral Plaster Board (Jaya Board) is the biggest producer/supplier of gypsum board in Indonesia. Jaya Board was estimated to contribute about 51 per cent to the gypsum market in 2006.

PT Petrojaya Boral Plaster Board (Jaya Board) which represents two well known international supplier of gypsum board, Boral and Lafarge is dominant in the market because of its highly reputable rep·u·ta·ble  
adj.
Having a good reputation; honorable.



repu·ta·bil
 name within major building architects/consultants, property developers and contractors. Being the pioneer in this business, Jaya Board has spacious room to create its own brand image in the market.

The key success factor of Pertojaya Boral in securing the major share of the market include the following:

* The company first opened the market by importing gypsum board from its principal, Boral of Australia. The image of high quality products was created by promoting this imported gypsum in the market.

* The company first entered the market to serve primarily the B2B market. While awareness of the public on gypsum products is still very low in early 1990's the level of awareness in B2B segment in the beginning. More over during 1994-1995 property business was in booming period in Indonesia, meaning that B2B segment was very attractive.

* The company has a vast range of products and offers a full system of gypsum ceiling and walling installation. With the concept of "full system" the customers receives full technical back up and product guarantee from two world wellknown manufacturers of gypsum, Boral and Lafarge. There is trend that major contractors preferred full system concept, so the contractor only deals with one company for their ceiling and walling needs.

* The company has strong sales force consisting of 35 people which receives regular up dates of development in building material business.

* As B2B market became the company's focus, it has special team to handle the B2B market.

* As the first layer, the company's marketing networks consists of Depo's supervised su·per·vise  
tr.v. su·per·vised, su·per·vis·ing, su·per·vis·es
To have the charge and direction of; superintend.



[Middle English *supervisen, from Medieval Latin
 by its 7 regional offices. The first layer particulary focus on B2b Market.

* The second layer of its marketing force, is the network of "Toko". The concept of developing "Toko" Jaya board is more to focus on the development of retail market.

* Continues promotion through advertisement, exhibition, seminars.

* Building relationships with contractors, architecs and property developers.
Table-1
Main producers of gypsum plaster board, 2007

Company                 Brands       Location         Annual
                                                      production
                                                      capacity
                                                      (sq.m)

PT Petrojaya Boral      Jaya Board   Cilegon,          36,250,000
Plater Board                         West Java,
                                     Gresik, East
                                     Java

PT Siam Indo Gypsum     Elephant     Bekasi, West      18,000,000
Industry                Star         Java

PT Knauf Gypsum         Knauf        Surabaya,         15,600,000
Indonesia                            East Java

PT Top Well Indoceil    Top Well     Surabaya,            124,000
                                     East Java

Source: ICN/Data Consult, Field research

Table-2
Product lines of main producers of gypsum board/plaster

Products                  Petrojaya    Siam Indo     Knauf
                            Boral       Gypsum      Gypsum

Gypsum board               [check]      [check]     [check]

Gypsum tile                [check]      [check]     [check]

Gypsum compound            [check]      [check]     [check]

Casting plester            [check]      [check]     [check]

Stoping compound           [check]      [check]     [check]

Jointing compound          [check]      [check]     [check]

Metal Furring System       [check]                  [check]

Metal Stude & U            [check]                  [check]
Runner

Main Tee & Cross tee       [check]                  [check]

Wall Angle, hanger         [check]                  [check]
jacket & clips

Hollow                     [check]                  [check]

Source: ICN/ Data Consult

Table-3
Price of gypsum boards by makes and thickness, 2007

(Rupiah)

Thickness        Jaya Board   Siam Indo   Knauf    Aplus

Distributor

Price

9 mm                 48,000      42,000   43,000   39,000

6.5 mm               50,000         --       --       --

12 mm                58,000      54,000   54,000      --

Project Price

9 mm                 47,000      41,000   42,000   38,000

12 mm                57,000      53,000   53,000      --

Source: ICN/ Data Consult

Table-4
Competitor profile, gypsum board

Description                 PT Petrojaya          PT Siam Indo
                                Boral

Business type            Joint venture         Joint venture Siam
                                               Cement Group of
                                               Thailand

Business lines           Manufacture           Manufacture

Product range            Full range and full
                         system
                         Gypsum board
                         Gypsum tile
                         Compound              Gypsum board
                         Metal frame           Gypsum tile
                         Accessories           Compound

Foreign partner          Boral of Australia    Siam Cement of
                         Lafarge of France     Thailand

Size of business         36.2 million sq.m     20.0 million sq.m
(production capacity)

Number of employee                       460                  267

Year in the                      12                    6
Indonesian market
                              Local 50%            Local 75%
Market orientation           Export 50%            Export 25%

Distribution channel     Distributor           Distributor (100%)
                         (100%)                Project 40%
                         Project 30%           Retail 60%
                         Retail 70%

Market share                           52.2%                  25%

Growth rate                            2-3%                    5%

Description                   PT Knauf
                               Gypsum

Business type            Joint venture
                         Knauf Group of
                         Germany

Business lines           Manufacture

Product range
                         Gypsum board
                         Gypsum tile
                         Compound
                         Metal frame &
                         Accessories
                         (outsourcing)

Foreign partner          Knauf of Germany

Size of business         15.6 million sq.m
(production capacity)

Number of employee                       150

Year in the                       5
Indonesian market
                              Local 80%
Market orientation           Export 20%

Distribution channel     Distributor (100%)
                         Project 35%
                         Retail 65%

Market share                             22%

Growth rate                               3%

Source: ICN
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Title Annotation:Industry
Publication:Indonesian Commercial Newsletter
Date:Feb 1, 2008
Words:1958
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