HD Construction Equipment Accelerates Push to Break Into Indonesia's Top Five

[Financial News] HD Construction Equipment, South Korea's largest construction equipment maker, has made a bold move to break into the top five in Indonesia's heavy equipment market, one of the largest in the world.
It will begin a full-scale local engagement strategy by building a massive integrated support base in East Kalimantan on Borneo, where demand from mining and construction is concentrated. The hub will cover sales, parts, service and workforce training.
According to industry sources on the 27th, HD Construction Equipment plans to complete as early as the end of this month the 'HD Construction Equipment Balikpapan Integrated Hub' under construction in Balikpapan, a port city on Borneo in Indonesia. After purchasing a 20,000-square-meter site in August 2024 and breaking ground, the project is now 95% complete. An official completion ceremony is scheduled for mid-October.
The facility is the company's second key infrastructure asset, following the Parts Distribution Center (PDC) opened in Jakarta in 2023. It combines a parts warehouse, training center and service base in one location, creating an integrated support system that covers the full lifecycle of heavy equipment.
Balikpapan was chosen for its geographic advantages. It sits at the center of a region packed with mining customers along the eastern coast and serves as a logistics hub connected to the Samarinda highway. It is also expected to link in the future with the outer ring road of Indonesia's new capital (IKN) and the highway leading to the new capital. As the relocation project for the new capital, a priority under the Prabowo Subianto administration after the Joko Widodo government, gains momentum, demand for construction and mining equipment in nearby areas is expected to rise further.
The integrated hub will serve as a forward base for sales, supporting local dealers and major customers. It will pre-position key parts to minimize equipment downtime and operate a workshop for repairs, overhauls and customized modifications. It will also include a training center to develop specialized personnel for Indonesia and the wider Asian region, as well as a utilization monitoring system that tracks the operating status of equipment across Indonesia, including mines in Kalimantan, in real time.
Kang Pil-seong, head of HD Construction Equipment's Hyundai Indonesia unit, said, "Through the Balikpapan integrated hub, we aim to provide parts within 48 hours in the Kalimantan region, maintain parts availability above 90%, and respond quickly to on-site requests." He added, "We will strengthen trust across the expectations of mining customers."
The company will also significantly strengthen its service-based revenue model. It plans to establish a comprehensive maintenance contract (FMC) in the local market, linked to the Jakarta PDC, which holds 15,003 items worth about $6 million, to guarantee equipment uptime and reduce fees if targets are not met. In addition, it will focus on supplying remanufactured and refurbished parts and equipment, which can cut costs by up to 40% compared with new products while offering 90% performance and a one-year, 5,000-hour warranty, as well as its telematics preventive maintenance solution, Hyundai Connect, to major mining customers.
The company is also rolling out a channel strategy to strengthen market penetration. HD Construction Equipment has shifted from a single-dealer structure to a multi-dealer system, and in 2023 it established a separate retail unit to open a direct sales channel. It currently operates 40 dealer bases, eight site support locations and four service points across Indonesia.
Its sales mix is led by the 20-ton excavator, which accounts for more than half of total volume. The company is also expanding into large mining equipment such as 125-ton ultra-large excavators and dump trucks. Last year, it sold four 125-ton ultra-large machines and 13 dump trucks. It also signed a memorandum of understanding with mining group Hasnur Group to conduct demonstration tests of electrified equipment and jointly develop mining solutions.
Indonesia is Southeast Asia's largest heavy equipment market, accounting for half of the region's annual demand of 40,000 construction machines, or 20,000 units. According to market research firm Mordor Intelligence, the country's construction equipment market is projected to grow at an average annual rate of 6.18%, from $3.62 billion in 2026 to $4.89 billion in 2031.
The Indonesian construction equipment market is currently led by Japan's Komatsu and Hitachi, China's Sany Group and XCMG, and U.S.-based Caterpillar. HD Construction Equipment aims to secure a double-digit combined market share for its Hyundai and Develon brands within five years and rise into the top five. Its sales target for this year is about 1,300 units combined for Hyundai and Develon, up 16% from a year earlier.
HD Construction Equipment is South Korea's largest construction equipment company, formed in January through the merger of HD Hyundai Construction Equipment and HD Hyundai Infracore. Operating the Hyundai and Develon brands simultaneously, the company is stepping up its push into emerging markets with a goal of reaching 14.1 trillion won in global sales by 2030.
[email protected] Kang Gu-gwi Reporter