MARKET OF PACKAGING INDUSTRY NOW GROWING

The Federation of Indonesian Packaging Agency [FPI] stated that increase of packaging industry 2013 did not meet initial target; this was due to Rupiah depreciated value against USD. Besides all buyings of packaging raw materials were quoted in USD. The loss incurred due to Rupiah depreciation against USD came to 25%-30% against 2013. FPI questioned the application of Law no.7/2011 on currency which made it mandatory to use Rupiah in every transaction.

However, FPI predicted attainment of turnover in 2014 could break through Rp55 trillion or growing by 6% compared to previous year at Rp52 trillion. Director of Business Development FPI, Ariana Susanti in Jakarta stated on Monday [3/3] that growth of turnover depended on demand for packaging from players of F&B industry. Over the past 5 years, growth of consumer goods business was always above 10% being jacked up by modern retail business and traditional market.

Ariana disclosed that Indonesia’s economic condition was unpredictable. He said that infra structure problem at home had its effect on packaging production. Moreover, flood that swept nearly all over the country had stagnated product delivery. He said that depreciated Rupiah put players of industry under pressure, it made producers increase selling price. Since October 2013 producers of packaging had increased selling price by 12% - 18%. On the other hand, application of BMAD PET would drive producers to once again increase selling price as price of raw materials increased. The effect was that sales would drop.

To minimize loss due to production cost, Arena said, producers had to axe promotion expenses. Packaging producers were enhancing efficiency by being selective in prioritizing tasks. For example, promotion cost which was suspected as high, was transferred to production cost. Producers refused to produce anything until there was order. The condition jacked up growth packaging industry as packaging was an essential element in consumer goods production.

He remarked further that raw materials for packaging could be obtained at home. Abroad, raw materials was available in China, Korea and the Middle East. Ariana disclosed that today 40% of plastic raw materials in Indonesia was imported. Therefore weakening of Rupiah had its impact on packaging industry; he said that increased price of imported raw materials could not jack up selling price of products.

Meanwhile the Director General of Small-and-Medium Industry [IKM], Ministry of Industry, Euis Saedah said that F&B Industry must observe packaging quality that consumers might be attracted. Packaging must be attractive so buyers would be attracted at first sight. Most consumers judge a product by its packaging because that was what he would take home.

He remarked further that, as data showed, food products of small industry were still prevalent so the chances to grow was great. To promote packaging quality he planned to facilitate trainings to make skilled workers. However product quality must still be maintained in spite of good packaging. To promote small-and-medium industry, quality of human resources must be promote as well through trainings. (SS)

Business New - March 7, 2014