Business Leaders: Rising Plastic Prices Could Spread and Trigger Layoffs
Chair of the Indonesian Employers’ Association (Apindo), Shinta Kamdani, states that the continuous rise in plastic prices not only risks entrepreneurs but also the workforce. Layoffs (PHK) are not out of the question, particularly in labour-intensive sectors, if plastic prices continue to soar.
Shinta states that the current increase in plastic raw material prices has exceeded normal fluctuation patterns. “If this cost pressure continues, the risk to the workforce becomes real, although the impact will be seen in several stages of adjustment,” Shinta said when contacted on Saturday, 18 April 2026.
She explains that in the initial stage, the business world will take adjustment measures through operational efficiencies, such as adjusting working hours, reducing overtime, and delaying expansion and recruitment. However, if the cost pressure continues to increase, becomes prolonged, and is not balanced with supportive policies, the business world’s capacity will become increasingly limited.
In such conditions, the risk to the workforce will increase. “In prolonged pressure situations, it is not impossible that it will lead to workforce reductions, especially in labour-intensive sectors that heavily rely on plastic packaging,” she said.
Geopolitical tensions disrupting the energy supply chain have caused plastic prices to skyrocket. Around 70 per cent of the global naphtha supply comes from the Middle East. Naphtha is a liquid derived from crude oil processing that serves as the main raw material in the petrochemical industry for producing plastic.
The rise in plastic resin prices exerts direct and significant pressure on business operational costs, especially in sectors heavily dependent on packaging such as food and beverages, FMCG, pharmaceuticals, logistics, and retail.
According to Shinta, the increase in plastic raw material prices has exceeded normal fluctuation patterns. Naphtha has risen by nearly 45 per cent. As a result, PET resin has increased by 60 per cent. “Packaging supplier factories have cut production capacity by around 20 to 30 per cent. Packaging prices have risen variably by up to 100 per cent to 150 per cent.
In this situation, business actors are in a very challenging position: on one hand, they must keep prices affordable for consumers to maintain people’s purchasing power.
“On the other hand, the pressure from rising costs continues to increase significantly. For SMEs and sectors with thin margins, this pressure has already begun to erode profitability and could disrupt business sustainability if it persists in the long term.”
Shinta states that this condition not only impacts the business world but also people’s purchasing power and overall economic stability.
Trade Minister Budi Santoso said the government is seeking various alternative supplier countries for plastic raw materials to maintain supply and price stability domestically. So far, the main raw material for plastic pellets in the form of naphtha has been supplied from the Middle East region.
However, global conditions have made shipping longer and competition between countries to obtain the material increasingly tight. “So indeed, plastic, the raw material for plastic pellets, has so far been naphtha from the Middle East. Now we have alternatives from Africa, India, and America,” Budi said on Thursday, 16 April 2026, as quoted from Antara.