Executive Summary
- Solid top-line growth with accelerating profitability: The sector generated USD 14.23bn revenue in 2024, growing at 6.2% CAGR (2022-2024), while operating and net profit expanded significantly faster due to improving scale and utilization.
- Operating leverage is kicking in: Controlled COGS growth and better capacity utilization drove operating profit CAGR of +60% and net profit CAGR of +129%, signaling a shift from volume-led growth to margin-led expansion.
- Backed by geopolitics economic movement: Growth is underpinned by China Plus One relocation, domestic power infrastructure build-out, and rising EV-related investment, positioning Indonesia as a complementary regional manufacturing base.
- Fragmented but maturing landscape: With 361 active companies in 2024, the sector remains fragmented, creating room for consolidation, scale advantages, and differentiated players to outperform as operational maturity improves.
Industry Snapshot 2024
The Manufacture of Electrical Equipment sector (KBLI 27) represents a fast-growing segment within Indonesia’s industrial manufacturing landscape, encompassing the production of electrical machinery, components, and equipment serving both domestic electrification needs and export-oriented manufacturing supply chains.
In 2024, these companies generated a Total Revenue of USD 14.23 billion, reflecting a CAGR of +6.2% over 2022-2024. Revenue growth highlights sustained demand from industrial expansion, power infrastructure development, and Indonesia’s increasing role as a complementary manufacturing base within regional supply chains.
Cost of Goods Sold (COGS) reached USD 1.34 billion, growing at a CAGR of +4.3% over 2022-2024, indicating improving cost absorption and scale efficiency amid expanding production volumes.
As operating leverage improved, the sector recorded an Operating Profit of USD 81 million, posting a strong CAGR of +60% over 2022-2024. Net Profit rose to USD 49 million, achieving an exceptional CAGR of +129% over the same period. Profit acceleration reflects better capacity utilization, scale-driven margin expansion, and a gradual shift toward higher value-added manufacturing activities.
As of 2024, the sector comprises 361 active companies, underscoring a fragmented yet expanding industrial base supported by both domestic players and export-focused manufacturers.
Industry Characteristics & Operating Landscape
Where do companies typically operate?
Operations under KBLI 27 are primarily concentrated in West Java and East Java, Indonesia’s core industrial hubs. These regions provide access to established manufacturing ecosystems, skilled labor pools, logistics infrastructure, and proximity to export gateways, enabling companies to efficiently serve both domestic electrification demand and overseas markets.
Beyond domestic supply, Indonesia increasingly functions as a secondary manufacturing base supporting global supply chains, particularly as a complementary alternative to China.
What drives demand in this sector?
Demand is driven by China Plus One supply chain diversification, as multinational manufacturers expand production capacity outside China to mitigate geopolitical and concentration risks. This structural trend is reinforced by industrial growth, power infrastructure development, and rising EV-related investment across Indonesia, all of which require expanding electrical equipment and component supply.
What defines the operational model?
The sector operates under a capital-intensive, scale-driven manufacturing model, where profitability is closely linked to production volume, utilization rates, and operational efficiency. As capacity utilization improves, companies benefit from rapid operating leverage, supporting strong profit expansion.
This model positions Indonesia as a secondary regional production hub, complementing larger manufacturing centers while capturing incremental demand from diversified global supply chains.
Interpreting the 2022-2024 Performance
The strong growth in operating and net profit relative to revenue reflects a sector transitioning from volume-led expansion toward efficiency- and scale-driven profitability. While cost growth remains controlled, improving utilization and manufacturing scale have materially enhanced margin performance.
Overall, companies in KBLI 27 demonstrates increasing competitiveness within regional electrical equipment manufacturing, supported by favorable structural tailwinds and improving operational maturity.
What This Means for Investors
- Attractive margin expansion story, not just growth: The 2022-2024 performance shows that incremental revenue is translating disproportionately into profit, making the sector appealing for investors focused on operating leverage and earnings scalability.
- Selective exposure is key: Fragmentation suggests uneven performance – investors should prioritize companies with scale, high utilization, export exposure, and stronger cost discipline, which are best positioned to sustain margin gains.
- Beneficiary of structural supply-chain shifts: Indonesia’s role as a secondary manufacturing hub offers medium-term visibility, especially for players integrated into multinational supply chains seeking China diversification.
- Consolidation and value-upgrading upside: As competition intensifies and margins improve, the sector is likely to see M&A activity, capacity rationalization, and movement toward higher value-added products, creating multiple value-creation levers beyond organic growth.
About Datagent
Datagent is the trusted intelligence partner for company data and insights across Southeast Asia and beyond. We combine firmographics, financials, macro and micro economics into one integrated dataset — helping organizations uncover opportunities, assess markets, and make smarter, data-backed decisions across 11 dynamic economies.
Datagent provides a total of 61 firmographic data fields, comprising 22 non-financial, and 39 financial indicators with coverage spanning 2022–2024.
This report is for informational purposes only and does not constitute financial advice or an invitation to invest. Decisions should be based on independent research and professional consultation to avoid any unintended liabilities.