MOSCOW (MRC) -- Sales in Indonesia's plastic industry are expected to rise 6.5% to 4.3 million tons (roughly USD8 billion) in 2016 supported by rising plastic and plastic products demand in those industries that use these materials (for example, Indonesia's food & beverage industry and the automotive industry), as per GV.
Fajar Budiono, Secretary General of the Aromatic, Olefin and Plastic Industry Association (Inaplas), said the year 2016 should be a good one for the plastic industry as the economy of Indonesia has started to stabilize after a prolonged slowdown.
However, in the first quarter of 2016, sales of plastic materials in Indonesia actually fell 1 percent due to the government's decision to implement an IDR 200 charge on each plastic bag sold by retailers such as supermarkets and vendors. This charge is part of a six-month trial and aims at curbing consumption of plastic bags, while at the same time generating more government revenue (the move to add a charge on each plastic bag has reportedly managed to reduce plastic bag consumption in Indonesian supermarkets by 25%).
Despite the weaker performance in Q1-2016, turnover in Indonesia's plastic industry is expected to rise 2% (y/y) to 2 million tons (USD 2.2 billion) in the second quarter of the year supported by rising consumption due to the fasting month of Ramadan and Idul Fitri (Muslims’ biggest religious festival) festivities. During these Islamic celebrations Indonesians increase consumption of food and beverage products as well as products such as clothes, shoes and bags.
Inaplas also stated that it hopes more Indonesian investors in the plastic industry to import new plastic manufacturing equipment from Taiwan. Most machinery that is used to produce plastic in Indonesia is imported from Taiwan due to the relatively affordable price and relatively high quality of the machinery. New developments in Taiwan have given birth to better equipment (higher quality, more efficient, and more environment-friendly). Therefore Inaplas recommends Indonesia's plastic and rubber manufacturing community to attend the Taipei International Plastic and Rubber Industry Show (PLAS) in Taiwan between 12-16 August 2016.
We remind that, as MRC reported earlier, Barito Pacific's subsidiary Chandra Asri Petrochemical (CAP) is reportedly planning to build a naphtha refinery at its Cilegon complex in Banten, Indonesia, with an estimated investment of USD740m. The company is now undertaking a one year preliminary study for the proposed project, which would reduce its reliance on naptha imports.
MRC