The drill rig is mainly composed of a rock drill, a drill boom (support, positioning and propulsion mechanism), a frame, a travel system and other necessary accessories, which are mainly used for tunnel drilling and blasting operations and mining exploration. It drills holes in the rock in order to put in explosives to blow the rock to complete the mining of stone or other stones. It has an automatic propulsion function, and multiple rock drills can work at the same time. In addition, rock drills can also be used in conjunction with rock crushers to break hard layers such as rock or concrete.
According to the different modes of operation, the rock drilling rig can be divided into two categories: track type (wheel type) and crawler type. At present, the Southeast Asian rock drilling rig market is mainly dominated by rail-mounted (wheeled) products, and in 2020, the output value share of rail-mounted rock drilling rigs in the market is as high as 82.30%, while the crawler type accounts for only 17.70%. From the perspective of downstream application fields, 54.55% of the rock drilling rigs are used for tunnel operations, and 27.27% are used for other underground works.
Indonesia has the highest market share and is expected to continue to grow during the forecast period
In terms of market share of each country, Indonesia is the largest revenue market in Southeast Asia, with a total market value of US$1.12 million in 2020 and a market share of 29.08% in the entire Southeast Asian market, followed by Singapore with a total market value of US$0.74 million and a market share of 19.31%, and Thailand as the third largest revenue market with a market share of 17.18% and a total market value of US$0.66 million in 2020. In addition, countries such as Malaysia, the Philippines and Vietnam have relatively low market shares, all of which are below 10%.
Based on the data of the past years and combined with the development characteristics and laws of the industry, we have predicted the future market structure of the industry, and it is expected that the proportion of each country will change as follows: Indonesia will continue to be the largest revenue market for the rock drilling rig industry in Southeast Asia, and its market share will continue to increase during the forecast period, and is expected to increase to 31.61% by 2027, while Malaysia's market share is expected to increase from 8.03% in 2020 to 18.97% in 2027 , which will replace Singapore as the second largest market, while Thailand will also see a slight increase in market share and remain the third largest market. On the contrary, Singapore's market share will decline significantly, or to 10.58% in 2027. In addition, the share of the Philippines and Vietnam in the market will decline to varying degrees.
The Southeast Asia drilling rig industry was valued at US$5.73 million in 2015 and has been volatile since then. After falling to US$5.09 million in 2016, the total value began to slowly recover in 2017, increasing to US$5.90 million in 2018, and then negative growth for two consecutive years, falling to only US$3.84 million in 2020 due to the impact of the epidemic, the lowest in the past six years. Based on this, we have carried out a series of function calculations and deduced the data for the next 7 years with scientific models, and finally predicted that the total market value of the rock drill rig industry in Southeast Asia will become 7.75 million US dollars by 2027.
The construction of tunnels and underground works has stimulated the development of the rock drilling rig industry in Southeast Asia, and the Cambodian market has great potential
Southeast Asian countries are increasingly aware of the role of infrastructure investment in economic growth. Governments have gone to great lengths to secure funding for infrastructure projects, making Southeast Asia at the forefront of global infrastructure. For example, Malaysia's "Three Links and One Penang" project, which costs 630 million ringgit (about S$2.5 billion), consists of four parts, namely three main roads and one connecting Gurney Drive and Butterworth. The Yacham Tunnel in Batam is also the first undersea tunnel in Southeast Asia. The development of these tunnels and underground works has stimulated the demand for rock drilling rigs.
Currently, Southeast Asia is seen as an engine of global economic growth. Among them, Cambodia has the highest economic growth rate, and although Cambodia is an underdeveloped country, it has particularly strong growth potential. Cambodia is the fastest-growing Southeast Asian country since 2017, with GDP growth of 7% in 2019, far exceeding Vietnam's 6.5%, according to the International Monetary Fund's Regional Economic Outlook. At the same time, Chinese investment is supporting the Cambodian economy. In 2018, foreign direct investment (FDI) totalled US$4.6 billion, of which 75% came from China.
In addition, tunneling and underground engineering in Cambodia is still in the initial stage of development, and the industry has great potential. At present, the government is actively constructing new tunnels and underground works. For example, the Cambodian city government of Phnom Penh plans to build three underground tunnels on the Russian Avenue around the Royal University of Phnom Penh's Wai Chinese College and the Shuanglu statue to ease traffic pressure. The project will solve the problem of road traffic congestion in the long term, thereby easing the traffic of students to school and facilitating the transportation of the general public. The continuous development of tunnels and underground works in Cambodia has brought opportunities to the drilling rig industry.
However, underground works include the construction of tunnels for roads, highways and railways, as well as the laying of sewers, hot water, steam, power pipes, and telephone lines, and these works have considerable hazards, including heavy manual labor, crystalline silica dust, cement dust, noise, vibration, diesel engine exhaust gases, chemical vapors, radon, etc. Sometimes this work has to be carried out in a stressful environment, and underground workers face serious and even fatal injuries and risks. While some hazards are the same as those of above-ground construction, working in a confined environment amplifies them, and some of them are specific to underground work, such as tunnel collapse or suffocation due to unexpected water accumulation. The high-risk nature of underground work may not have a direct impact on the demand for drill rigs, but it will affect the market structure of its workforce, which in turn will pose a threat to the industry.