Meeting the Upstream-Downstream Plastic Industry, the Minister of Industry Gets Assurance of Safe Plastic Stock
JAKARTA - The Ministry of Industry (Kemenperin) guarantees that the availability of plastic stocks in the country will remain maintained even though the geopolitical dynamics in the Strait of Hormuz have begun to disrupt the global supply chain.
This certainty was obtained after the Ministry of Industry brought together petrochemical industry players from upstream to downstream on Thursday, April 16, to discuss joint mitigation measures.
Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said that the industry had made a commitment to maintain the continuity of supply, especially for small industry players, so that they remain competitive.
Even so, the government continues to closely monitor the global situation that has the potential to affect production.
"From the results of the meeting, we received assurances from the industry that plastic stocks should not be a problem. I underline the word should, because the government will continue to closely monitor the global situation that impacts the production and stocks of this subsector," said Agus quoted from an official statement, Friday, April 17.
Agus admitted that the turmoil in the Strait of Hormuz had triggered a distortion in the price of plastic products due to the increase in the cost of logistics and the delivery time of imported raw materials.
The delivery duration which was originally an average of 15 days has now become as long as 50 days, so it has a direct impact on the increase in the cost burden of manufacturing.
This situation, according to Agus, is an important momentum to strengthen the independence of the national petrochemical industry. The government is trying to reduce its dependence on imported raw materials by exploring domestic alternative sources, one of which is the use of crude palm oil (CPO) as a substitute for naphtha.
"We must look at all the potential of national resources that can be alternatives to raw materials for the petrochemical industry, including CPO, although the economic challenges still need to be calculated carefully," he said.
In addition to diversifying raw materials, industrial players also expect domestic market protection from the onslaught of imported products so that the investment climate in the petrochemical sub-sector remains attractive for new capital investment.
The strategic meeting was attended by a number of associations and industry giants, including the Association of Indonesian Olefin, Aromatic and Plastics Industries (Inaplas), PT Chandra Asri Petrochemical, PT Lotte Chemical Indonesia, PT Lotte Chemical Titan Nusantara, to recycling associations such as the Association of Indonesian Plastic Recycling (ADUPI) and the Indonesian Plastics Recyclers (IPR).