Indonesia Testing, Inspection and Certification (TIC) Market Overview
Indonesia TIC market size is forecast to reach $650.96 Million by 2027, growing at a CAGR of 3.83% from 2022 to 2027. The growth of the Indonesia TIC Market is majorly attributed to the factors such as increasing demand for complying with the global quality and safety standards and rising adoption of environmental initiatives. The exponential growth and rising demand for industrial inspection, product evaluation and system certification in oil & gas, mining, agriculture, manufacturing units, automotive, food and beverage sector coupled with stringent environment regulations is augmenting the market. The rising integration of emerging technologies including artificial intelligence (AI) and internet of things (IoT) in electric components is bolstering the Indonesia TIC market. Moreover, the growing awareness among consumers about the importance of certification, conformity assessment and increase in volume of exports and imports of various products are increasing the demand for going through stringent tests to meet the international standards and thus propelling the growth of the market.
Indonesia TIC Market Report Coverage
The report: “Indonesia TIC Industry Outlook – Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Indonesia TIC Industry.
- In-house testing is analyzed to witness highest growth with a CAGR of 4.29% in the Indonesia TIC Market during 2022-2027. The growth is attributed to the rising demand for inspection and testing services for manufactured products to undergo a series of comprehensive mandatory & customer specified supplementary and special tests at its in-house testing facilities by qualified personnel.
- Indonesia TIC Market held the largest share in 2021 in Java segment, attributing to factors like high investments in environmentally sustainable projects, rising number of railway infrastructure project contracts and so on.
- Rising demand towards food testing or inspection due to increasing import/export activities, agricultural or food contamination, food safety violation and others along with increasing number of medical device regulations or standards regarding certification, labelling, licensing or related approvals are analyzed to significantly drive the Indonesia Testing, Inspection and Certification Market during the forecast period 2022-2027.
Indonesia TIC Market Value Share, by Geography, 2021, (%)
Indonesia TIC Segment Analysis- By Type
By typing, Indonesia TIC Market has been segmented into outsourcing and in-house. In-house testing is analyzed to grow with the highest CAGR of 4.29% during the forecast period 2022-2027. The burgeoning demand for inspection and testing services for manufactured products to undergo a series of comprehensive mandatory & customer specified supplementary and special tests at its in-house testing facilities by its qualified personnel is the key factor driving the Indonesia Testing, Inspection and Certification Market. In-house laboratory conducts safety and quality tests inside industry premises to assure efficiencies and effectiveness in order to design, implement, and train all personnel to Standard Operating Procedures. The increasing consumer awareness about green labelled products promoting sustainable development to meet the highest standards of environmental quality and performance set by International Organization for Standardization (ISO) has contributed towards the growth of the market. Moreover, the rising environmental crisis is also increasing the demand for adherence to safe standards to curb the industrial pollution. In February 2021, DNV GL entered into a partnership with ReSea Project, which is a Danish company cleaning rivers and oceans in Indonesia. And as a part of this partnership DNV is set to certify the organization to DNV’s Chain of Custody standard built to assure the traceability and integrity of plastic recovered from the hydrosphere. Such factors are further set to propel the market growth of Indonesia Testing, Inspection and Certification Market in the long run.
Indonesia TIC Segment Analysis- By End Users
By end users, Indonesia TIC market has been segmented into Agriculture, Automotive, Food, Oil & Gas, Marine, Mining, Manufacturing, Chemicals, Energy & Power, Building Infrastructure, Industrial equipment, Retail, Rail, Logistics, Education, E-commerce, others. Mining sector dominated the Indonesia Testing, Inspection and Certification market acquiring a market share of 19% in 2021. The burgeoning demand for ensuring safety risk along with weighing information related to the quantity and quality of minerals, with higher accuracy acts as a major factor, contributing towards market growth. Indonesia Quality Control is offering TIC services for mining sector. According to the Energy outlook, the mining industry is anticipated to grow by 42% in the next 5 years as the demand and consumption for electricity has been increasing too due to increasing urbanization and an increasing number of commercial and industrial facilities requiring greater access to electricity. This is leading to the demand for coal. Furthermore, this sector also poses high accidental, health, environmental and safety risks, due to which the adoption rate of testing, inspection and certification services such as risk based inspection, statutory and voluntary inspection, non- destructive testing, equipment certification and others is increasing. These factors are set to drive the market forward in the coming years.
Indonesia TIC Segment Analysis- By Geography
By Geography, Indonesia TIC market has been segmented into Sumatra, Kalimantan, Java, Sulawesi, Papua, Lesser Sunda Islands and Maluku. Java dominated the Indonesia Testing, Inspection and Certification market with a share of 47% in 2021, owing to high investments in environmentally sustainable projects, rising number of railway infrastructure project contracts. In September 2021, the Indonesian Government had revealed about involving China regarding construction of the multibillion dollar railway project, which was earlier assigned to Japan. Establishment of the 145 km railway line project, with an estimated cost of $5.5 billion, which raised to $7.9 billion will involve deployment of signaling systems, rolling stocks, and many related components. Such projects are bound to drive the need for railway operators or authorities to meet up with the required regulatory compliance, thus aiding the market growth of testing, inspection & certification (TIC) services within the country. Sumatra is analysed to witness the highest growth with a CAGR of 5.58% during 2022-2027. In January 2020, SGS Indonesia announced about opening the new coal laboratory in Jambi, Sumatera for ensuring that all coal analysis is performed to internationally recognized SGS global standards. Such developments are set to create significant growth opportunities for the market during 2022-2027.
Indonesia TIC Market Drivers
Rising demand towards food testing or inspection due to increasing import/export activities, agricultural or food contamination, food safety violation and others are impacting the market growth
Rising food or agricultural product imports or exports, stringent governmental regulations or policies to improve food testing or inspection activities is considered vital in driving Indonesia testing, inspection & certification services market. Adding to this, product recalls for retrieving potentially unsafe food products from the market by food manufacturers due to the presence of harmful ingredients, contamination, or banned substances have helped in boosting the Indonesia TIC market. Rising investments on food testing laboratories is also augmenting the market. Food industry is considered as a highly regulated industry due to stringent regulatory compliance ensuring food quality assurance and safety for the consumers. Due to microbial or allergen contamination, faulty labelling of food items, presence of foreign particles within processed foods and non-compliance with safety standards for agro food products and others, consumers have started shifting towards certified, tested and authentic approved food & beverage products. These factors eventually impact the market growth of varied TIC services for the food industry including nutrition & composition testing, contaminant & microbiology testing, food labelling certification, and so on. In October 2021, the Philippine Trade and Investment Center, Jakarta announced about receiving approval regarding the extension of two food safety testing laboratories through Decree No. 8528/KPTS/KR020/K/10/2021, from the Indonesian Ministry of Agriculture, which is valid upto three years. With this, Philippine food safety testing laboratories will continue to approve or conduct residue or contaminant testing of varied agricultural food products including bananas, pineapples and so on, helping Filipino exporters to capture Indonesian markets, which is set to fuel the market growth in the long run.
Increasing number of medical device regulations or standards regarding certification, labelling, licensing or related approvals drives its market forward
Various government regulating organizations or bodies have been constantly working on updating the regulatory mandates or standards from time to time to improve quality assurance, testing, inspection and certification of medical devices in Indonesia, which acts as a major driver boosting its market growth. According to a report issued in 2020 by Statistics Indonesia, the state-owned institution is responsible for social and economic surveys, Indonesia has 17.9 million persons aged 65 and up. The elderly population is predicted to increase by more than 40% by 2025, making Indonesia one of Asia's fastest aging countries. This will have a huge economic and societal impact, notably in the healthcare industry. The demand for Class III medical devices such as High-frequency ventilators, blood sampling monitors, oxygen supply units and so on have been growing over-time majorly amidst the pandemic, as these devices are used to maintain or protect human life. Since these devices require licensed FDA approvals before marketing and distribution across countries, the market growth of TIC services is impacted significantly. Indonesia implemented local content criteria in June 2021, prohibiting the importation of over 5,400 imported medical device products in 79 categories from the LKPP e-Catalogue public procurement system used by hospitals and clinics. Only locally manufactured medical equipment with at least 40% local content will be listed in the e-Catalogue system for those 79 categories. This will help to boost the TIC market in Indonesia.
Indonesia TIC Market Challenges
Presence of local laws and norms of the countries in which they operate, limiting its efficiency hinder its market growth
The country's regulations and standards are likely to create barriers for the acceptance of products internationally as every country has its own standards and regulation for product certification. Thus, it creates unnecessary addition cost to address the conflicts arising due to difference in standards and regulation. In Indonesia TIC, companies have to follow the laws and have to abide by the regulations and norms of countries. The Indonesian government and related industrial players have been active in formulating standards for products and services. The National Standardization Agency of Indonesia is an Indonesian government agency responsible for standardization, conformity assessment, and metrology activities in Indonesia. A wide variety of product types are subject to mandatory Indonesian National Standards (SNI) testing and certification. TIC companies are subject to local laws and should follow the regulations and norms of the countries in which they operate, which can limit their efficiency. Furthermore, there is always a risk associated with the standardisation and quality of testing and certification offered by TIC companies. Such factors have been creating an adverse impact on its market growth.
Indonesia TIC Market Landscape
Product innovations, acquisitions, Partnerships and R&D activities are key strategies adopted by players in the Indonesia Testing, Inspection and Certification market. Indonesia TIC top 10 companies include:
- SGS Group
- TUV Nord Group
- Intertek Group PLC
- TUV SUD AG
- Bureau Veritas
- Cotecna Inspection
- DNV GL
- ALS Group
- CAST Laboratories Pte Ltd.
- In May 2022, Bureau Veritas, Indonesia announced about signing a memorandum of understanding with Biro Klasifikasi Indonesia (PERSERO), a state owned enterprise of the Republic of Indonesia engaged in classification, statutory survey and commercial services. This partnership was done with an aim to share knowledge and expertise in the field of testing, inspection, certification, training, technical Consultancy, green economy, carbon emission measurement, risk Based inspection, off-shore platform decommissioning assessment/inspection, building and infrastructure, and other commercial services.
- In September 2021, SGS Indonesia announced partnership with Indonesia’s upcoming B2B digital ecommerce platform, MadeinIndonesia.com, to provide easy access to SGS services, including seller verification, inspection, production monitoring, product testing, product conformity and certification services, to be used by international buyers interested in online sourcing and procurement from Indonesia.
- In February 2021, DNV GL entered into a partnership with ReSea Project, which is a Danish company cleaning rivers and oceans in Indonesia, and as a part of this partnership DNV is set to certify the organization to DNV GL’s Chain of Custody standard built to assure the traceability and integrity of plastic recovered from the hydrosphere.
Report Code: ITR 0212
Report Code: AIR 0053
Report Code: ESR 0091
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