Industry Expected to Seek Alternative Plastic Raw Materials

Vice Minister of Industry Faisol Riza hopes that the industry will undertake diversification to avoid dependence on naphtha as a plastic raw material, which is currently scarce due to the Middle East war. “Diversification of naphtha substitutes is indeed needed, both from gas and from vegetable sources. Hopefully, this can become an opportunity for CPO, for example,” said Faisol at the DPR building in Senayan on Wednesday, 8 April 2026. In particular, Faisol noted, Indonesia produces crude palm oil or CPO in large quantities. However, Faisol stated that the idea of using CPO as an alternative plastic raw material to substitute for naphtha is still in the study process. He hopes that crude palm oil can become the main raw material for plastic production. Faisol explained that producers are facing difficulties in obtaining plastic raw materials in the form of naphtha due to the closure of the Strait of Hormuz amid escalating war in the Middle East. He said the producers’ constraints lie in the scarcity of goods, not the price. He mentioned that there are several countries that can serve as alternative naphtha import sources, namely Africa, China, and America. “The industry is also calculating logistics costs and so on,” he stated. Because it will divert imports, Faisol said the delivery time will be longer. However, he hopes the delivery does not take up to 50 days. Faisol did not rule out the possibility that the distribution time will impact the industry. He promised to find ways to ensure the downstream industry does not experience disruptions. Besides using naphtha, Faisol said a plastic manufacturing company uses LPG as a raw material. The National Awakening Party politician stated that the Ministry of Industry has communicated with businesspeople as well as related ministries and agencies regarding the plastic raw material crisis. To the Ministry of Energy and Mineral Resources, for example, Faisol requested support for a larger volume of LPG imports for plastic raw material needs. Faisol said the Ministry of Industry also requested restrictions on condensate and gas exports because they are naphtha substitutes.