INDONESIA - Indonesia has a lot going for it: with a workforce of more than 200 million, it is the world’s third largest democracy, the largest Muslim majority country in the world, has significantly lower wages than China, and as the largest economy in South East Asia it is a founding member of ASEAN - the largest free-trade block in the region giving tariff-free access to a market in excess of 617 million consumers.
Arianna Susanti, business development director of the Indonesian Packaging Federation, said that the packaging industry is looking to book US$3.86 billion (Rp 51.06 trillion) in revenue this year, an increase of 11% from last year, boosted by food and beverage industry demand, which comprises 70% of sales.
Plastic consumption in Indonesia is still relatively low on a per-capita basis at just over 17 kilogrammes (kg) per year, compared to around 35 kg in Malaysia and Thailand and 40 kg in Singapore, according to the Indonesian Olefin, Aromatic and Plastic Association (INAplas).
Despite the fact that Indonesia is a major oil producing country, with 3.6 billion barrels of proven crude oil reserves, local plastic producers face raw material shortages and are reliant on imports.
The Indonesian plastic packaging industry sources approximately 40% of the material it uses from overseas annually.
Yet, the industry faces issues such as import tariffs and a steady decline in the value of the rupiah since 2012, adding additional risks to the plastic packaging sector due to its reliance on imported raw materials.
Stuart Hoggard analyses the state of the plastic markets in Indonesia, in the June 2015 issue of Packaging Business Insight Asia.
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