Business Owners Say No Layoffs in Plastic Factories, Warning for This Company
Jakarta, CNBC Indonesia - The issue of potential layoffs (PHK) in the plastic industry has resurfaced amid global pressures. However, industry players assess that the risk is not evenly distributed and tends to be concentrated in certain downstream sectors.
The plastic industry is known for its long supply chain, from upstream petrochemicals to finished consumer products. This condition means that the impact of the crisis is not felt uniformly across all lines.
On the upstream side, production is relatively more stable because it is supported by sustainable operational systems. Meanwhile, on the downstream side, pressures can be greater depending on the business characteristics of each player. The risk of layoffs is greater for businesses that have high dependence on one market segment.
“If it happens at all, it is usually in very specific downstream areas, for example, dependent on one customer or heavily impacted by dumping. But in the plastic industry in general, it is very rare,” said Vice Chairman of the Indonesian Olefin, Aromatic, and Plastic Industry Association (Inaplas) Edi Rivai in Jakarta, quoted on Wednesday (6/5/2026).
Dependence on one type of product also increases risk when demand weakens or prices are pressured by competition from imported products. As a result, companies have little room to adjust their business.
Conversely, businesses with diverse product portfolios tend to be more flexible in facing market changes. They can shift production to other segments that still have stable demand.
“This industry is cyclical in nature. There are tough times, there are good times. But usually, we adjust, rather than immediately reducing the workforce,” he said.
In addition, labour costs are not the main component in the plastic industry’s cost structure, so layoffs are not the first choice for efficiency. The biggest pressures actually come from rising raw material prices and supply disruptions.
Therefore, industry players focus more on keeping operations running rather than carrying out large-scale workforce reductions.
“The most vulnerable are those that are too dependent on one market. So going forward, they must indeed be more flexible and not rely on just one source,” Edi emphasised.