Personal Protective Equipment Market In Indonesia

INTRODUCTION

In the lines of work where serious injuries are everyday threats and employees are exposed to hazardous environment, companies are taking precaution measures in order to make sure that their employees are protected from harms and injuries. These lines of work include workers in the oil field, offshore, mining location and construction site. The best safeguard for the workers are by wearing Personal Protective Equipment (PPE) depending on the requirement.

Personal protective equipment is any equipment intended to protect a worker's head, face, eyes, hands, or feet. It represents collectively the forms of safety equipment that people wear to protect their safety and health when they are doing work. PPE does not eliminate hazards. Protective equipment is just one part of an overall safety program that includes administrative and engineering controls, training, and a strong commitment on the part of management and workers.

PPE can be divided according to its specific protective functions, like: full-body protection (work-wear, uniforms, protective clothing, life jackets and fall protection); hardhats, safety eyewear, hearing protectors, work gloves and shoes, respirators, fall-protection gear, high-visibility and protective apparel, and gas-detection instruments. The picture below shows the safety equipments on human body:

Picture 1. Safety Equipments on Human Body

PPE MARKET REVIEW

The market for PPE itself is very promising, due to the high number of local and foreign companies that are investing in earth explorations and constructions for property or infrastructure. There are a couple of ways to learn about the PPE market size in Indonesia; by digging into the players behind it or studying the import of safety goods to Indonesia.

1. PPE Players

The number of suppliers specializing in PPE product is numerous. Most of them do not fully specialize in PPE product only, but also carry other lines of goods and services in the same area. For instance, PT. Triwira Insan Lestari in Jakarta, who is also a PPE supplier for PT. Halliburton Indonesia, also offers parts for steal construction, over-head crane, and cargo lift.

The characteristic of PPE players is very flexible depends on the demand of the customers. In other words, they partly have the goods that they are selling for the sake of the showroom, but ready to go out to the manufacturers and find the specific goods that are needed by the clients. Basically, they already have some sort of affiliation with certain brands of products, straight from the manufacturers either inside or outside of Indonesia. Therefore, whenever they receive an order or contract of providing certain items, they will go straight to their manufacturers.

Even though there are a lot of PPE players in Indonesia, it is quite stressful to find them. Only a few of them listed their company on yellow pages, have their own websites or company profiles ready to send through snail mail. They do not spend too much money on the marketing area also. Therefore, in order to find a dependable supplier, the best possible way is through word of mouth from the same users that uses PPE.

If the user is using bidding procedure from suppliers, it would be much easier because the suppliers will be approach the user in order to be entered in the bidding process. However, there are a lot of small to medium companies that uses less than one-hundred set of PPE per year that usually will have to go out and purchase PPE themselves. And these are the companies that will have problem in finding good quality that will be able to deliver the goods that they needed.

2. Import of Safety Goods

For the purpose of this research, the import of safety headgear will be used as an analysis data, mainly because the oil/gas services, construction sites and mining facilities workers are using the same kind of helmets. The useful lifespan of helmets are also basically longer than other equipments because they are less likely to be in contact with harmful things. The replacement rates of other equipments such as gloves or boots are rather higher and sometimes are disposable after one-time use.

According to several PPE vendors, most of their products came from outside of Indonesia (straight from the manufacturers), from low-end up to high-end products. Therefore, a more reliable or close to a precise data can be obtained from using a data from Statistics Indonesia (BPS). The data for analysis would be the import commodity for safety headgear to Indonesia from 2002 to 2004 (Graph 1).

Source: Statistics Indonesia (BPS).

The demand of safety devices are increasing throughout the year. The weight of imported safety headgear is increasing even though the dollar spent is lower on 2003. There might be a price drop on certain items that made the total money spent for safety headgear is lower in 2003. In 2004 however, both the weight and the dollar spent rocketed to more that triple of 2003. The simple and rational explanation to this phenomenon could be the increase in explorations and constructions in Indonesia that automatically increase the use of PPE.

3. Market Size

The major users of PPE in Indonesia are from the construction, oil/gas, and mining industries. In order to get the estimation of the actual person using PPE is to find the companies that are employing them.

According to MiningIndo.com, a premier up-to-date mining and oil/gas portal of Indonesia, the number of active mining companies that is listed with them is close to 200 (Appendix 1). In the oil/gas area, the number of companies might be lower than mining, but there are major international oil companies that use a great length of PPE for explorations. The industries above are already a big market for PPE, with added construction industry that is continual in Indonesia as a developing country.

All of those companies are required by law to provide PPE for the safety of their workers. Since most of them are local companies, the market is highly price sensitive and end users often choose less expensive products, especially in the current trend to save cost in every aspect of operations. Low and middle class safety equipment will be the popular choice of most companies just enough to follow the law while only international companies that will maintain their brand preferences of top quality gears.

SUMMARY

The market for PPE in Indonesia