Indonesia is an attractive market for a number of imported products, including plastic products. With a population of over 230 million people, Indonesia is a very huge market. It is reasonable if Indonesia became one of the countries targeted by illegal stuff. Weak monitoring and legal enforcement by the related apparatuses causes such practice to take place continuously. If the authorities are willing to act firmly, it is very easy to track it. “Illegal imports are very disturbing, and we ask the government to help us solve this”, said Fajar Budiyono, Secretary General of the Indonesia Olefin, Aromatic, and Plastic Industry Association (Inaplas) in Jakarta (Monday, September 2).
The plastic industry has asked the government to verity the import of finished plastic products that enter Indonesia. Fajar said that the import of finished plastic products into Indonesia this year is estimated at USD 1.6 billion, increased 33% compared to the previous period at USD 1.2 billion. According to him, this estimate is about the legally imported plastics. In fact, the illegally imported plastics circulating in the market today are a lot more.
He said that Indonesia already has a safety instrument to withstand the circulation of illegal imports, ranging from non-tariff barriers, anti-dumping standards, as well as government-borne import duty (BMDTP) facility. Therefore, his party has asked the government, in this case the technical ministries, both the Ministry of Industry and the Ministry of Trade, to verity the import of finished plastic products. What is meant by import verification is that the government verifies the volume, type, and country of origin of the plastic products. The reason is that there have been many products that are imported via Malaysia or ASEAN, although they are coming from other countries, just to get a 0% tax.
In addition, his party asked the government to be serious in realizing BMDTP each year. For this year, the realization of BMDTP can be felt in September. In fact, BMDTP is much needed by the industry considering that 40%-50% of the raw materials have to be imported because of the very limited capability of local producers.
Meanwhile, the Central Bureau of Statistics (BPS) recorded that the importation of plastics and plastic goods for January to April 2013 rose 11.7% year-on-year to USD 2.48 billion. While, imports in the previous period in 2012 were at USD 2.22 billion. Plastic imports in April 2013 amounted to USD 688.9 million, up 9% from March 2013 which stood at USD 631.6 million. He explained that the increase in imports of plastics is the impact of the continuation of the slowing of the domestic plastic industry since last year. As a result, supply of imported plastics is still large early this year.
He admitted that the national plastic industry last year was less enthusiastic. Because the demand of plastic products in international markets fell due to global crisis. He considered that the rampant imports of plastics products are quite reasonable. The reason is that consumption of plastics and plastic products in the domestic market is estimated to continue to grow around 8% this year. Inevitably, imported plastic products also increase the penetration into the local market. However, he remains optimistic about the plastic business in the country. Domestic plastic business can improve in the middle of this year. Because there is good news from the petrochemical industry, especially the upstream sector. Price of naphtha, one of the main raw materials of upstream petrochemical industry, started to decline.
Business News - September 6, 2013