The Ministry of Industry continues to encourage the development of
downstream plastic industry because it has good market potential both at home
and abroad. Records of the ministry of industry stated that today national
consumption per capita per year is only 10 kilograms (kg), relatively low
compared to other ASEAN countries, such as Singapore, Malaysia, and Thailand
which reached 40 kg. This was conveyed by Panggah Susanto, Director General of manufacturing
industry Base of the ministry of industry in Jakarta on Tuesday (5/14).
Panggah said that the potential consumption of plastic product in
Indonesia is still quite large. According to him, the biggest demand in the
form of plastic packaging is driven by the growth of the food & beverage
industry which produces rigid packaging, flexible packaging, thermoforming, and
extrusion, which is spreading across several regions. The installed capacity of
the national plastic packaging industry reached 2.35 million tons per year and
its utilization reached 70%, so the average production reached 1.65 million
tons per year. Labor absorption is also quite large, about 350.000 people.
Plastic consumption in Indonesia is projected to reach 1.9 million tons
by the first half of 2013. This amount increases approximately 22.58% over the
same period last year at 1.55 million tons.
The momentum of the golden harvest and approaching Lebaran in early
August is a factor that drives the increase in domestic demand for plastics.
Meanwhile, the sales value of the plastics industry in the domestic market
reached approximately Rp.47.5 trillion in the first half of 2013, assuming that
consumption reached 1.9 million tons (1.9 billion kg) and the price is Rp.25, 000
per kg. Turnover of the first quarter is worth Rp.22.5 trillion and Rp.25
trillion in this quarter.
However, Panggah admitted that Indonesia is still heavily dependent on
plastic raw materials. According to him, import of plastic raw materials is
greater because so far the petrochemical industry depends on imported raw materials.
Because the growth of the upstream sector of this industry cannot keep pace
with the growth of the downstream sector. “Each year, the petrochemical
industry in the country imports such products with a value of USD5.5 billion”,
Panggah said.
According to Panggah, plastic raw material price are very vulnerable to
oil. Because if the global crude oil price increases, the price of plastics raw
materials also increases. This happened last year where price of plastics raw
materials crept up. The price of plastics raw materials (polyethylene) has
increased by 10% - 15% due to rising world’s crude oil prices. He said that
when crude oil prices rise, it will have an impact on the increase in raw
materials prices.
He said that the development of national plastics industry is also
constrained by the lack of capacity of refinery that produces naphtha and
condensate for the upstream petrochemical industry. He said that limited raw
materials makes Indonesia still relies on imported naphtha and condensate. In
2010, imports of naphtha reached 1.6 million tons and condensate 33 million
barrels. “The need for raw materials is an essential factor for the movement of
the industry. “Unfortunately, the need for raw materials, especially plastics,
still cannot be fully met”, Panggah said.
To that end, he said, the government continues to encourage the
development of an oil refinery industry integrated with petrochemical industry
in order to strengthen the structure of the plastics industry fro upstream to
downstream by providing incentives, such as tax holiday, tax allowance, and
import duty exemption for capital goods. Moreover, he added, the government is
also encouraging the development of human resources as and effort to boost the
plastics industry. (E)
Business News - May 17,2013
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