Jakarta – The Ministry of Industry continues to monitor developments in global geopolitical dynamics, including the situation in the Strait of Hormuz, which has the potential to affect the supply chain of petrochemical raw materials and the national plastics industry subsector. To anticipate these impacts, the Ministry has convened stakeholders across the petrochemical value chain from upstream and intermediate industries to downstream and plastic recycling industries to discuss the latest conditions and formulate joint mitigation measures.

Minister of Industry Agus Gumiwang Kartasasmita stated that the meeting revealed a sense of optimism among industry players regarding the availability of domestic plastic stock. “From the meeting, we received assurances from industry players that plastic stock should not pose any issues. I emphasize the word ‘should,’ as the government will continue to closely monitor global developments that may affect production and stock levels in this subsector,” said Minister Agus in Jakarta on Thursday (April 16).

In addition, the participating industries expressed their commitment to maintaining the continuity of plastic supply, particularly for small-scale industries, to ensure their products remain competitive in the market.

The Ministry also recognizes that geopolitical tensions in the Strait of Hormuz have caused distortions in the domestic pricing structure of plastic products. Price adjustments are likely due to rising logistics and port freight costs, the imposition of premium surcharges, and disruptions in the delivery timelines of imported raw materials.

“Delivery times, which previously averaged around 15 days, can now extend to up to 50 days. This situation certainly contributes to increased production costs,” the Minister noted.

Furthermore, the Minister emphasized that the current global situation serves as an important lesson learned, underscoring the need to strengthen the independence of the national petrochemical industry, particularly in terms of domestic raw material supply.

“This situation further highlights the importance of building a strong and self-reliant national petrochemical industry, so that dependence on imported raw materials can be gradually reduced,” he said.

The meeting also revealed that investors expect the petrochemical subsector to become increasingly attractive for new investments. One key factor that needs to be strengthened is the protection of the domestic market from the influx of imported products.

The government, the Minister added, will continue efforts to meet national raw material needs while maintaining a balance between the requirements of the energy sector including motor vehicle fuels and the needs of the petrochemical industry.

The meeting also highlighted the potential development of substitute feedstocks for naphtha from alternative domestic sources, including crude palm oil (CPO). Although currently relatively costly, this option is considered worth exploring as part of a strategy to diversify feedstocks and reduce reliance on imports.

“We must explore all potential national resources that could serve as alternative feedstocks for the petrochemical industry, including CPO, even though the economic feasibility still needs to be carefully assessed,” the Minister explained.

In closing, the Minister stated that under current geopolitical conditions, competition among countries to secure petrochemical raw materials is expected to intensify. Therefore, industry players have proposed that Indonesia should be able to access raw materials that are not only of high quality but also enhance both corporate competitiveness and product competitiveness.

“The Ministry of Industry will continue to stand alongside industry players in safeguarding the resilience of the national manufacturing sector amid global dynamics,” he concluded.

The meeting was attended by various industry associations and companies, including the Indonesian Olefin, Aromatics, and Plastics Industry Association (INAPLAS), PT Chandra Asri Petrochemical, PT Lotte Chemical Indonesia, PT Asahimas Chemical, PT Polytama Propindo, PT Polyplex Films Indonesia, PT Kofuku Plastic Indonesia, Indorama Group, PT Trinseo Materials Indonesia, PT Lotte Chemical Titan Nusantara, the Indonesian Plastic Recycling Association (ADUPI), PT Astina Indah Abadi, and PT Bumi Lestari Unggul.

Also present were PT Selamat Anugrah Indonesia, PT Pelita Mekar Semesta, Indonesian Plastics Recyclers (IPR), the Indonesian Plastic Woven Industry Association (GIATPI), the Indonesian Plastic Export Import Association (AEIXIPINDO), the Indonesian Flexible Packaging Industry Association (Rotokemas), PT Supernova Flexible Packaging, the Indonesian Common-Sense Plastics Association (PASTI), the Indonesian Biaxially Oriented Films Association (ABOFI), PT Indopoly, and the Indonesian Downstream Plastics Industry Association (APHINDO).