Indonesia, located in Southeast Asia, is the fourth most populous country in the world with a population exceeding 270 million. It is the largest economy in ASEAN and has the largest consumer base in Southeast Asia. The growth of Indonesia's plastic industry has been fueled by the continuous growth of the Indonesian economy.
Indonesia's GDP per capita has been growing, with a compound annual growth rate of 3.9% from 2014 to 2023, reaching US$ 4,914 in 2023, an increase of 2.7% year-over-year. In 2023, Indonesia's real GDP was US$ 1.41 trillion, calculated at constant 2010 market prices, an increase of 5.05% year-over-year, although this was a 0.3% decrease from 2022. Despite a slight slowdown, Indonesia's GDP growth rate remains well above the global rate of 2.6%.
The Indonesian plastic and plastic products industry is gradually recovering. In 2022, Indonesia’s imports of plastics and their products increased by 17.9% year-over-year, reaching US$11.2 billion, making it the 19th largest importer of plastics and their products globally. According to CRI analysis, plastics and their products are the fifth largest import category for Indonesia. Indonesia’s imports of plastics and their products mainly come from China (US$ 3.45 billion), Singapore (US$ 1.26 billion), Thailand (US$ 1.24 billion), South Korea (US$ 1 billion), and Malaysia (US $960 million).
In terms of exports, Indonesia’s exports of plastic raw materials and products have been trending upwards. In 2022, exports of plastics and their products amounted to US$ 3.13 billion, making Indonesia the 39th largest exporter of plastics and their products globally, a year-over-year increase of 20.4%. According to CRI analysis, Japan, China, Vietnam, Malaysia, and the United States are the top five export destinations for Indonesian plastic raw materials and products.
Plastics and plastic products in Indonesia are used extensively across various industries including packaging, construction, electronics, and automotive manufacturing. Driven by Indonesia's continued economic development and population growth, the domestic consumer market is expected to continue expanding in the medium to long term. Moreover, as the penetration of e-commerce accelerates in Indonesia, the demand for plastic packaging is expected to remain strong. Additionally, growing demand from end-user industries such as electrical and electronics and the construction sector is expected to drive growth in the Indonesian plastic market.
To control environmental issues caused by disposable plastic products, the Indonesian government has issued a policy to phase out the use of various single-use plastic products by the end of 2029, including polystyrene foam used in food packaging, disposable plastic cutlery, plastic straws, plastic shopping bags, multi-layer packaging films, and small plastic packaging bags.
Despite the Indonesian government's stringent environmental policies, which impose certain restrictions on the use of plastics, the long-term growth potential for the Indonesian plastic industry remains significant. The industry is expected to grow significantly through investments from both FDI and domestic companies, focusing on the development and production of environmentally friendly plastic products to mitigate policy impacts on the Indonesian plastic industry.
CRI predicts that there are substantial investment opportunities for foreign investors in the Indonesian plastic industry. Imports of plastics and their products are expected to continue growing in the coming years, with imports projected to reach US$ 16.08 billion by 2033, achieving a compound annual growth rate (CAGR) of 3.5% from 2024 to 2033.
Topics covered:
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.
Download eBook