Behind the mega infrastructure projects being accelerated by the Indonesian government—from toll roads and ports to industrial estates—is an industry that often escapes the spotlight but plays a highly strategic and valuable role: the heavy equipment spare parts business. As excavators, dump trucks, cranes, and loaders work tirelessly to build the foundation of the economy, the availability of genuine spare parts and prompt after-sales service are crucial to the smooth operation of projects.
Data shows that Indonesia’s heavy equipment industry remains resilient. For example, according to reports, revenue from spare parts and after-sales services for heavy equipment increased to approximately IDR 2.8 trillion in the first quarter of 2025 for one major heavy equipment company. On the broader market front, recent research projects that the Indonesian construction heavy equipment market will grow at a CAGR of around 4.12% from 2024 to 2030, driven by continued increases in public infrastructure investment.
In fact, when heavy equipment and industrial machinery are at the forefront of construction, reliable spare parts and after-sales service systems are key to keeping major projects running on time and on budget. One article noted that heavy equipment manufacturers have begun strengthening their distribution systems and warehouse availability for spare parts, as a single day’s delay in component repairs can mean significant losses for infrastructure projects.
Given the extremely high value of spare parts—both in terms of capital, project downtime, and recovery costs—the heavy equipment spare parts business could be called a “hidden giant” within the construction ecosystem. For contractors, distributors, and service providers, understanding the opportunities and anticipating the risks in this business is increasingly crucial.
If you are involved in heavy equipment business, spare parts distribution, or infrastructure projects that depend on the reliability of machinery, contact L&G Insurance Brokers for relevant risk protection guidance.
Market Trends and Economic Opportunities
Demand for heavy equipment spare parts in Indonesia is driven by a surge in infrastructure investment and expansion projects in the mining/manufacturing sector. The Indonesian heavy equipment market is expected to experience solid growth in the coming years; the market size is projected to reach several billion dollars by 2025 with a significant annual growth rate—a situation that automatically increases the need for after-sales service and spare parts.
Corporate data reinforces this picture: one major player in the heavy equipment sector reported a significant increase in revenue from spare parts sales and after-sales services—indicating that the spare parts business line is a significant contributor to group revenue and signaling real field demand for parts availability and fast maintenance. Quarterly figures show a consistent increase in unit sales volume and spare parts revenue growth through 2025.
On the demand side, the main drivers come from national infrastructure projects (including toll road tenders, dams, and the smelter/mineral downstream sector) as well as large-scale mining and energy projects that require the mobilization of large amounts of heavy equipment. The government is also still preparing a package of infrastructure projects and large production facilities, meaning a steady flow of EPC contracts and maintenance needs—this positioning the spare parts business as a strategic commodity with high economic value.
Globally, the spare parts market for heavy equipment also shows an upward trend in demand and opportunities for digitalization (warehouse automation, predictive maintenance, e-commerce parts), which opens up space for distributors and logistics players to improve their services.OTIF(on-time in-full) and reduce customer downtime. With growing demand and complex logistics risks, opportunities for providers of spare parts, high-value storage, and insurance solutions that secure inventory and transit are growing.
Challenges in the Heavy Equipment Parts Industry
Despite its bright prospects, the heavy equipment spare parts business faces significant challenges. One of these is its heavy dependence on imports. Over 70% of critical components, such as filters, bearings, and hydraulic parts, are still imported from Japan, the United States, or China. Fluctuations in the rupiah exchange rate can directly impact selling prices in the domestic market, resulting in thinner profit margins.
Furthermore, the emergence of imitation products and non-original spare parts is a serious problem. Counterfeit products circulating on the market at significantly lower prices can erode customer confidence and cause serious damage to heavy equipment. This often affects small contractors who are tempted by low prices without considering the long-term risks.
The next challenge comes from technological change. With the introduction of digital systems and sensor-based heavy equipment, the need for certified technicians and more sophisticated spare parts management systems is increasing rapidly. Many local distributors are not yet ready for IoT-based digital stock management and predictive maintenance systems, which are now standard in major projects like the construction of the new capital city (IKN) and the Trans-Sumatra toll road.
Insurance and Risk Protection Opportunities in the Heavy Equipment Spare Parts Business
The heavy equipment spare parts industry, while promising, also presents complex risk exposures. The turnover of high-value goods, long supply chains, and the risk of damage during shipping make this sector highly relevant for protection with the right insurance solutions. This presents significant opportunities for industry players and insurance brokers who deeply understand the nature of this business.
First, the risk of damage and loss of inventory is a major issue. Spare parts warehouses often house billions of rupiah worth of goods, making them vulnerable to fire, flooding, or theft. A Property All Risks (PAR) policy is an essential solution to provide comprehensive protection, including against risks resulting from human error or failure of cooling and electrical systems.
Second, for logistics, distribution, and import-export activities, Marine Cargo Insurance coverage is vital. Heavy equipment spare parts are frequently imported from overseas and shipped to various infrastructure projects in remote areas, where the risk of damage during sea or land transportation is high. This coverage ensures the safety of every shipment and reduces potential financial losses for distributors.
Furthermore, this business also requires protection against the risk of legal liability, especially in the event of accidents or damage resulting from the installation or maintenance of spare parts performed by distributors or mechanics. A policy like Comprehensive General Liability (CGL) can help companies avoid legal claims that could disrupt cash flow and damage their reputation.
In the context of financing, companies acting as official distributors or sole agents are often involved in government procurement and large EPC projects that require bank guarantees (performance bonds, advance payment bonds, or maintenance bonds). This is where the role of insurance brokers becomes strategic, helping companies obtain competitive and efficient guarantees without disrupting cash flow.
Given the potential for continued investment in the national construction and infrastructure sector until 2030, the heavy equipment spare parts business is clearly not just a supporting sector, but a vital part of the development ecosystem. With sound risk management and insurance protection, companies can maximize growth opportunities while maintaining business sustainability amidst global economic dynamics.
Conclusion and Recommendations
The heavy equipment spare parts business is now a hidden driving force in Indonesia’s development. Amidst massive infrastructure and mining project expansion, demand for high-quality components continues to rise. However, this significant opportunity also carries significant risks—from supply chain disruptions and import price volatility to potential losses due to accidents, fires, or legal liability claims.
To maintain business stability and competitiveness, companies need to view insurance not merely as an administrative obligation but as a strategic risk management tool. With the right protection, valuable assets, inventory, and even a company’s reputation can be protected from unexpected financial shocks. Solutions such as Property All Risks, Marine Cargo, Comprehensive General Liability, and Bank Guarantee Bonds not only provide protection but also increase client and project partner confidence in the company’s credibility.
As an experienced insurance broker in the industrial sector, L&G Insurance Broker is ready to assist distribution companies, suppliers, and authorized heavy equipment agents in designing comprehensive coverage tailored to their business characteristics. With a professional approach and extensive network of insurance companies, L&G ensures the process of policy submission, claims, and project guarantee requirements are efficient and secure.
Contact the L&G Insurance Broker team or visit our official website at lngrisk.co.id to get a free consultation and the best protection solution for your business.
Because in the heavy equipment parts business — every component counts, and every risk must be guarded against with precision.
