Company Boss's Direct Insight: Surging Plastic Prices Bring New Profits
Jakarta, CNBC Indonesia - The global surge in plastic prices is bringing benefits to the paper-based packaging industry. The shift in demand from plastic to paper is increasingly felt in the market, following the price spike and shortage of plastic raw materials due to geopolitical conflicts in the Middle East.
Managing Director of PT Alkindo Naratama Tbk (ALDO) Herwanto Susanto revealed that the situation is having a positive impact on the company’s performance.
“The current rise in plastic prices is providing a fairly positive impact on our paper packaging business performance. We see a consistent shift in demand towards paper products as the main substitute,” Herwanto told CNBC Indonesia on Friday (24/4/2026).
Nevertheless, he emphasised that the impact has not yet fully reflected in the current financial reports.
“Regarding profit margins, it should be understood that this plastic price increase phenomenon is relatively new, so its impact on Alkindo’s financial reports is not yet directly felt in the current period. However, we are very optimistic about the continuously positive demand trend in the market,” he stated.
However, based on its internal data, Herwanto mentioned that Alkindo has experienced a significant surge in demand for paper packaging since the beginning of the year.
“According to our records, there has been a quite encouraging increase in demand for Alkindo’s paper packaging, in the range of 20% to 30% since the start of this year. This growth has occurred gradually as old plastic stocks at the industry level are depleted and market prices adjust,” he explained.
According to him, this surge in demand has the potential to become a new driver for the company’s revenue, although the detailed contribution is still awaiting future financial reports.
“Although the detailed contribution to overall turnover is still being monitored in upcoming financial reports, this demand growth is clearly a strong driver for the company’s revenue,” he continued.
The phenomenon of the shift from plastic to paper is most evident in the food packaging sector. Herwanto noted that businesses are starting to seek more stable and sustainable alternatives.
“This shift is most felt in the food packaging sector. The increased use of paper packaging in this sector is very significant because businesses are starting to look for more stable and sustainable alternatives,” Herwanto said.
Furthermore, he explained that the plastic price surge is triggered by supply shortages related to conflicts in the Middle East. This condition is prompting Alkindo to aggressively capture market opportunities.
“The main factor driving this acceleration is the shortage of plastic stocks and the price surge due to conflicts in the Middle East. To capture this opportunity, we have prepared a fairly massive expansion strategy,” he stated.
This year, he said, the company has allocated a budget of around Rp100 billion for expansion, split into Rp50 billion for capital expenditure (capex) and Rp50 billion for working capital.
“This funding is focused on increasing production capacity by up to 30% in the downstream line, including the purchase of land for a new factory in West Java,” he revealed.
In addition, Herwanto mentioned that Alkindo is also accelerating the development of other alternatives to meet market needs that cannot be fully replaced by paper.
“In addition, we are also accelerating the development of bioplastics to meet packaging needs that cannot be fully replaced by paper materials,” he said.
Amid the global plastic price surge, Alkindo ensures that its production cost structure remains stable. This is because reliance on plastic in the production process is relatively small.
“The main challenge at present is how we respond to the acceleration of demand that is coming faster than initially anticipated. However, on the raw materials side, we want to emphasise that Alkindo’s operations are not burdened by the plastic price increase due to Middle East conflicts,” Herwanto clarified.
“The portion of plastic used in our processes is very minimal, so such price fluctuations do not significantly disrupt our cost structure. Our focus remains on maintaining the smooth supply chain of paper raw materials to ensure optimal production,” he added.
With the strengthening shift trend, the paper packaging industry is considered to be in a strategic position to capitalise on the ongoing momentum of rising plastic prices.