Inaplas Reveals a Plenty of Plastic Industry Challenges in 2018

INDUSTRY.co.id - Jakarta, The petrochemical industry must be prepared to face a number of challenges this year. Especially in the political year, the petrochemical industry must be prepared to face a less stable business climate.

This was conveyed by the Chairman of the Association of Indonesian Olefin, Aromatic and Plastic Industry (Inaplas) Didik Susilo at the opening of the conference "Indonesia Petrochemical & Plastic Industry Outlook 2018" at Pullman Hotel, Jakarta, Monday (5/1/2018).

"There are a number of challenges that will overshadow the petrochemical industry this year, as elections are simultaneous and elections are a political agenda that is of concern to the public," said Didik.

In addition, continued Didik, another petrochemical industry challenge is the matter of plastic taxes. Then the 25% reduction program of waste volume by the planned government is also suspected will directly affect the decrease in consumption of plastic goods.

"Not to mention there is a free trade agreement (FTA) between Asean with China, this will cause a surge in the price of plastic products," said Didik.

As a result imports of plastic finished goods is still high, the range of US $ 2 billion or worth 800,000 tons each year. "Meanwhile, there is currently no integration between the petroleum and petrochemical industries, so the availability of raw materials is limited," said Didik.

Meanwhile, Secretary General of Inaplas, Fajar A.D. Budiyono said that the rise in world oil prices which reached US $ 70 per barrel impacted the petrochemical industry in Indonesia, including plastic industry producers. The increase in world oil prices made the price increase of plastic raw material to reach US $ 10-25 per metric ton.

"This increase has been occurring since mid-January 2018. Tend now the price is strengthening this hold for plastic raw materials," said Fajar.

The price of plastic raw materials of polypropylene type in January 2018 amounted to US $ 1,400 per ton, Polyethylene at US $ 1,567 per ton. Then, propylene is US $ 950 per ton and ethylene is US $ 1,000 per ton.

According to Dawn, this price increase is predicted to continue until February-March 2018. In fact, usually the price cycle of plastic raw materials decreased in the span of the month.

The rise in plastic prices, said Dawn would not disrupt the sale of plastic in the country. Therefore, food and beverage industries that require plastic packaging still continue to grow.

This year, the plastics industry projected sales to grow 5.4-5.5 percent from 2017 reached 2.8 million tons. Plastic industry demand is expected to increase with the celebration of regional head election simultaneously in 2018.

"Hopefully this political year, the consumption of food and beverages will increase because there are many additional, many pilkada, campaigns, meaning that if the political year is cool, we will be optimistic that there will be an increase," he said.