Plastic Entrepreneurs Complain of Hits from All Directions
Jakarta, CNBC Indonesia - The national plastic industry is not only facing a surge in raw material prices but also significant pressure from logistics and shipping costs. This increase adds further burden to the industry amid the global crisis.
In normal situations, the raw material supply chain is relatively stable. However, geopolitical disruptions have drastically altered distribution routes, forcing industry players to seek alternative sources that are farther away.
This route change directly impacts logistics costs, which have risen sharply. Longer delivery times also add complexity to production management. Additionally, shipping risk factors have triggered significant increases in insurance costs.
“The first issue is insurance. So the insurance for the raw materials we buy has risen very high. Then, on top of that, there are war surcharges that can reach 150 to 200 dollars,” said Chairman of the Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas) Suhat Miyarso during a discussion at the Industrial Journalists’ Forum (Forwin) in Jakarta on Tuesday (5/5/2026).
This cost surge has become one of the biggest pressures on the industry at present. Not only that, shifting supply sources from the Middle East to other regions such as America or Africa has drastically increased shipping distances.
As a result, logistics costs can soar several times over compared to normal conditions. This situation significantly raises operational costs at the upstream end of the industry.
“If previously we bought from the Middle East in just 15 days, now it can take 50 days. That means logistics costs have nearly tripled,” said Suhat.
This cost pressure cannot be fully passed on to consumers due to limitations in public purchasing power.
On the other hand, the industry must maintain production to avoid halts, so most of the additional costs must be borne internally.
Vice Chairman of Inaplas Edi Rivai added that cost increases are occurring across almost all lines, from raw materials to operations.
“This price increase is almost linear with crude oil, around 80 to 120 per cent. Plus, supporting costs like logistics and energy are also rising,” he explained.
This situation is squeezing industry margins, especially for businesses that lack flexibility in pricing.
Amid this pressure, the industry hopes for government intervention to maintain stability in logistics and distribution costs.
“If logistics costs are not controlled, it will certainly burden the industry heavily. Because distribution is an important part of the production chain,” Edi emphasised.