Plastic consumption rise 14.3% this year

The Jakarta Post, Jakarta

After suffering in the doldrums during the economic crisis, local plastics producers have enjoyed increased demand for the past two years.

A group of three plastics producer associations, INAplas, revealed that domestic plastics consumption this year had reached the pre-crisis level of 1.6 million tons.

That was an 14.3 percent increase, from 1.4 million tons last year.

In 1999, plastics consumption stood at 1.1 million tons, a mild increase from 900,000 to 950,000 tons in 1998.

INAplas president Didie W. Soewondho explained in Jakarta on Wednesday that the domestic plastics market had grown by 15 percent in the period 1999 to 2001.

"Over the past two years, the industry has been consolidating itself to improve its performance," Didie was quoted by Antara as saying.

Didie noted that the steady increase in national plastics consumption indicated that the domestic plastics market had recovered from the crisis.

He described that during the height of the crisis in 1998, Indonesian olefin and plastics industries were struck by a 35 percent to 40 percent decline in domestic consumption.

Because of the sharp fall of consumption in 1998, many local plastics producers slashed production by 45 percent to 50 percent.

Before the crisis, domestic plastics consumption stood at around 1.6 million ton per year.

Besides increasing consumption in the domestic market, local plastics producers also benefited from increased demand from the export market.

Indonesia's plastics exports have been growing by 25 percent per year.

Local plastics producers export one-third of their output.

Nevertheless, Didie explained that local producers would tap domestic more than export markets, as international demand for plastics would ease because of the looming recession in the United States.

Didie, nevertheless, predicted that the international market for plastics and olefins would recover in the next two years to three years after the impact of the Sept. 11 terrorist attacks on the U.S. had eased off.

As for the domestic market, Didie forecast that demand for plastics would increase by six percent to seven percent next year.

Nevertheless, some issues are clouding local plastics producers, including the rising price of raw materials at a time of decreasing prices for products made from plastic, as well as tighter competition following the implementation of free trade in the region.

INAplas is a new association bringing together the Indonesian Plastic Producers Association (Apindo), the Indonesian Plastic Raw Materials Producers Association (AB Plastik), and the Indonesian Plastic Producers Federation (Fiplasin).