INAPLAS promotes Indonesia's petrochemical self-reliance through feedstock diversification
Jakarta (ANTARA) - The Indonesian Olefin, Aromatic, and Plastic Industry Association (INAPLAS) is promoting national petrochemical industry self-reliance through a strategy of diversifying feedstock amid ongoing global pressures.
INAPLAS General Chairman Suhat Miyarso, during a discussion in Jakarta on Tuesday, stressed that diversification is key for the industry to remain resilient while reducing dependence on imports of primary feedstock such as naphtha.
According to him, the current crisis is triggered by global geopolitical dynamics that impose various pressures, from feedstock supply to distribution channels, impacting the plastics and petrochemical industries.
INAPLAS Deputy General Chairman Edi Rivai added that the pressures on the petrochemical industry are not short-term but have persisted for several years since the COVID-19 pandemic.
Moreover, global overcapacity, particularly from the Middle East and China, is a major factor pressuring the market.
He stated that in facing these conditions, the industry is repositioning its strategy by optimising various alternative feedstocks, such as LPG and condensate, although naphtha usage still dominates.
For instance, LPG has been utilised as a blending material with certain proportions to improve cost efficiency.
Despite facing various pressures, the national petrochemical industry continues to demonstrate resilience. Edi assured that no layoffs have occurred in the sector to date, even though production costs have increased.
As a long-term strengthening measure, INAPLAS is also urging the government to expand feedstock sources, not only relying on crude oil but also utilising methanol, coal, gas, and bio-feedstock.
INAPLAS Secretary General Fajar Budiono noted that diversification efforts are part of a long-term strategy to ensure the industry’s sustainability.
According to him, although Indonesia has naphtha production capacity, its utilisation is currently prioritised for the energy sector.
Furthermore, he said, industry players are currently in survival mode but are expected to soon transition to a more stable and sustainable operational level.
Import pressures and dumping practices also pose serious challenges to the domestic industry. INAPLAS revealed that the influx of cheap imported products due to global oversupply is increasingly pressuring the competitiveness of local producers.
Therefore, it is proposing trade remedy instruments such as anti-dumping and safeguard measures to protect and strengthen this industry.
Additionally, the policy of zero import duty on LPG is viewed as a positive step in supporting feedstock diversification. However, its utilisation remains limited and not yet fully competitive compared to naphtha.
Looking ahead, INAPLAS is optimistic that industry conditions will improve in the coming months as signs of feedstock supply recovery begin to emerge.