High Plastic Prices Prompt Manufacturers to Implement "Survival Mode"

JAKARTA, KOMPAS.com - The Indonesian Plastic Olefin Aromatic Industry Association (Inaplas) states that the shortage of raw materials leading to high plastic prices has prompted manufacturers to implement “survival mode”. Inaplas Secretary General Fajar Budiono explained that the plastic raw material, naphtha, is difficult to obtain because the Strait of Hormuz has been closed due to the war between Israel and the United States (US) against Iran. Gulf countries, which supply 70 percent of the world’s naphtha, can no longer ship these petrochemical products. “We are now operating in survival mode. This means running at minimum production capacity that is still economically viable,” Fajar said when contacted by Kompas.com on Thursday (3/4/2026). According to him, domestic plastic industry players are not complaining about the price of raw materials or the higher logistics costs. For context, shipments of naphtha from West Asia (Middle East) via the Strait of Hormuz usually take only 15 days, while from those three countries it can take 50 days. “We’re not talking about prices now. We’re talking about having the goods first,” Fajar stated. “Prices are now a secondary concern; the important thing is to have the goods now,” he added. This situation means companies can no longer produce plastic and meet market demand. “In standby mode, the machines would have to be kept running but not operating. But we’re still in survival mode now,” Fajar said. In addition to seeking alternative supplies, plastic manufacturers can also use raw materials other than naphtha. One possible raw material is propane from Liquefied Petroleum Gas (LPG). The price of that petroleum-based raw material is considered suitable for the industry in June, July, and August.