Plastic Industry Threatened To Fall Due To Import Relaxation

Director of Domestic and International Partnerships Inaplas Budi Susanto. (Photo: Doc. ANTARA)

JAKARTA - The Indonesian Aromatic and Plastic Olefin Industry Association (Inaplas) stated that many plastic industries will close and harm their derivative industries due to the Regulation of the Minister of Trade (Permendag) Number 8 of 2024 which has relaxed a number of import permits.

"If this (Permendag 8/2024) is allowed, many plastic production factories will close and harm the derivative industry, such as food-drinking, household appliances, automotive, textiles, and others," said Director of Domestic and International Partnerships. Inaplas Budi Susanto was quoted by ANTARA, Thursday, July 18.

Budi complained that Indonesia's situation was flooded with imported plastic raw materials, especially from Thailand, Vietnam, Malaysia, China, South Korea, and the Middle East.

The increase in imported products, he said, had been monitored since 2020. Based on data collected by Inaplas, there was an increase of 29 percent if the number of imports in 2020 compared to the number of imports in 2023, from 1.47 million tons in 2020 to 1.900 million tons in 2023.

This amount is the total import of a number of plastic raw materials, namely LLDPE, HDPE, Homopolymer, and Copolymer.

"This condition causes the plastic raw material industry, such as PE and PP in the country, to be difficult to survive and currently running only 50' 60 percent of its capacity," said Budi.

The capacity of the plastic raw material industry, which is an upstream industry of domestic plastic, is 3.5 million tons per year.

"The condition of the company is getting weaker because it bears significant losses," he said.

With the issuance of Regulation of the Minister of Trade Number 8 of 2024 which revised Permendag 36 of 2023, Budi assessed that the plastic industry would decline even more.

He is worried that the downturn will result in the plastic raw material industry to close and have an impact on the employment sector.

"As much as 3 million workers will lose their jobs," said Budi.

He hopes that the Minister of Trade Regulation 8/2024 will be revised soon and re-establish the Minister of Trade Regulation No. 36 of 2023 concerning the prohibition of restrictions on imported goods.

"Permendag Number 36 of 2023 must be re-implemented to limit imported plastic products from other countries," he said.

The issuance of Permendag 8/2024 aims to overcome problems that arise due to the implementation of Permendag 36/2023 in conjunction with 3/2024 in conjunction with 7/2024 which tightens imports and adds import licensing requirements in the form of technical regulations (pertek).

Since its enactment on March 10, 2024, container buildup has occurred in several main ports, such as Tanjung Priok, Tanjung Perak, Tanjung Emas, and others.

The number of containers detained reached 17,304 containers at Tanjung Priok Port and 9,111 containers at Tanjung Perak Port.

With the issuance of Permendag 8/2024, a number of import licensing relaxations were carried out.