How the construction industry is helping Indonesia transform its circular economy
In September 2024, Indonesia's National Development Planning Ministry (PPN/Bappenas) approved the integration of circular economy principles into the country's 2025-2045 National Long-Term Development Plan (RPJPN). At the same time, Indonesia is striving to transition to clean energy by pursuing the creation of a suitable ecosystem for the supply chain of electric vehicle batteries. In both these areas, Volvo CE, together with its local dealer partner PT Indotruck Utama (ITU), is offering solutions to local construction companies.
First, to help the country contribute to its circular economy ambitions ITU, is providing full Volvo Certified Rebuild Machine (VCRM) services for key construction machinery, including excavators, articulated haulers, and wheel loaders. The services offered by the company’s Palembang Branch and Balikpapan Branch give hardworking equipment the makeover it deserves while avoiding the need to purchase new machinery. By restoring existing assets, the program optimizes budgets and the long-term value of the original investment. Behind the rebuild are Volvo experts who use Genuine Volvo Parts to give the machines a new life.
Alongside the rebuild facility, ITU inaugurated a new Component Rebuild Centre (CRC) in Balikpapan, Borneo, in February 2023, further advancing the company's circular economy goals. The CRC is a world-class facility with a staff of 40 that rebuilds components for Volvo’s construction equipment, extending the life cycle of machinery, and reducing the need for new products to be introduced into the infrastructure cycle.
Since the opening of ITU’s CRC, over 400 rebuilt components have been sold as part of ITU’s Component Exchange program, providing lower Total Cost of Ownership (TCO) for customers in the construction and mining industries. The most popular rebuilt components include engines, transmissions, dropboxes, differentials, and wheel hubs, offering a valuable alternative for companies not only looking to boost their overall sustainability levels but also seeking to reduce equipment maintenance costs without compromising quality.
Bambang Prijono, President Director of PT Indotruck Utama (ITU), commented:
“At PT Indotruck Utama, we recognize that sustainable development is not just about building for today but for the future. With this in mind, our commitment to circularity and remanufacturing aligns with Indonesia’s sustainability goals, and we are proud to contribute to the country’s green transformation. By extending the life of our machinery and reducing emissions through innovative practices, we are not only helping to preserve the environment but also providing our customers with efficient and responsible solutions.”
The role of electric construction machines in Indonesia in sustainable development
In addition to supporting Indonesia’s circular economy ambitions, Volvo CE is also proactively supporting the country’s drive for greater use of electric vehicles, with the introduction of the first electric construction machines in the country. The latest to be introduced is the L120 Electric, which was unveiled during a special ceremony at the Mining Indonesia exhibition in Jakarta in September 2024, is Volvo CE’s largest electric machine in the country, designed for a wide range of applications, including mining, construction, waste management, recycling, agriculture, forestry, and port operations.
This launch of the L120 Electric follows the successful introduction of the ECR25 Electric compact excavator and L25 Electric compact wheel loader in 2023.
AM Muralidharan, Head of Productivity Services and Retail Development, Volvo Construction Equipment, Region Asia said:
"Interest in electric machines is on the rise globally, and the timing couldn't be better for Indonesia as it pursues its sustainable construction goals. With Indonesia's commitment to eco-friendly infrastructure and clean energy, our electric machines are ideally positioned to support the country's goals by delivering efficient, low-emission solutions for projects of any scale."
Through a combination of national initiatives, including the Indonesian government's ambitious sustainability goals for the new capital city Nusantara, and industry efforts like Volvo CE’s circular economy programs, Indonesia is making significant strides toward developing greener infrastructure and securing a more sustainable future for the citizens.