Indonesia Plastics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Indonesia Plastics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Indonesian plastics market is projected to register a CAGR of more than 6% during the forecast period.

COVID-19 negatively impacted the country's production and supply of plastics during the lockdown. However, the demand from the packaging segment surged due to the increasing use of online food and retail e-commerce service during the pandemic. After 2020, the market improved steadily due to continuous activities within the country.

Key Highlights

• Over the medium term, growing demand from the end-user industries, such as packaging, electrical, and electronics, as well as the construction industry, is expected to drive the market’s growth.
• However, government regulations on the use of plastics and over-reliance on the imports of raw materials are the major factor hindering the growth of the studied market.
• Rising demand for eco-friendly products is expected to offer various opportunities for the growth of the market.
• By end-user industry, the packaging segment is projected to register the highest CAGR during the forecast period.

Key Market TrendsGrowing Demand from the Packaging Industry

• The primary utilization of plastics is in the packaging segment due to better wear and chemical resistance, ease of molding, recyclability, puncture resistance, and high mechanical strength. Furthermore, polyethylene terephthalate (PET) is Indonesia's most common plastic used for packaging purposes.
• Plastics are more commonly used in the food, retail, and pharmaceutical sector for packaging goods due to their properties such as portability, design flexibility, ease of cleaning, lightweight, and protection against moisture over other materials. In addition, low handling hazards, low toxicity, and the absence of bisphenol A (BPA) and heavy metals are other factors that allow PET to be used for food packaging.
• In the pharmaceutical industry, plastics are commonly used for packaging blood bags, syringes, nebulizers, and medicine bottles. Furthermore, the growing population in Indonesia is the main reason for pharmaceutical development which has increased the consumption of plastics within the country.
• In Indonesia the use of plastics is increasing in the e-commerce industry for packaging goods. For instance, According to Agriculture and Agri Food Canada, the sales value of retail e-commerce in Indonesia is valued at approximately USD 37 billion in 2021, which increased as compared to USD 27.72 billion in 2020.
• According to United States Department of Agriculture, the retail sales value of packaged foods in Indonesia was approximately USD 33 billion in 2021, up from approximately USD 32.2 billion in 2020. This trend is expected to continue, which shows the growing consumption of plastics in food packaging within the country.

Injection Molding Technology to Dominate the Market

• In Injection molding technology, the thermoplastic polymer is heated above its melting point and converted into a molten form of low viscosity. This molten plastic is then forced and injected into a mold of the desired shape to get the desired product.
• Injection molding technology is used to make the shape of simple or complex plastics such as helmets, bottle caps, and fans using thermoplastic polymers. Injection molding technology is also used for wire insulation, bottles, and cosmetics packaging.
• Injection molding is done using high-quality processing resins. It has several advantages: design flexibility, cost-effectiveness, fast manufacturing process, low labor costs, good color control, and good product quality. In addition, this process is mostly capital consuming, but it offers better and more accurate products than other technology types.
• The pharmaceutical industry's demand for injection molding is increasing since it is utilized to manufacture various medical equipment parts such as beakers, test tubes, caps, seals, closures, valves, syringes, and inhalers. Furthermore, according to UN Comtrade, Indonesia spent approximately USD 4.4 billion on pharmaceutical imported products in 2021, a rapid increase from approximately USD 1.15 billion in 2020. This trend demonstrates the future opportunity of injection moulding technology in the pharmaceutical sector.
• Injection molding is more extensively used in the manufacturing of automotive parts such as door panels, bumpers, grilles, light housings, fender, and other parts. According to the Organisation Internationale des Constructeurs d'Automobiles (OICA), Indonesia produced around 1.12 million units of vehicles in 2021, witnessing a growth rate of 63% as compared to the previous year.

Competitive Landscape

Indonesia’s plastics market is consolidated. Some major players in the market (not in any particular order) include BASF SE, PT LOTTE CHEMICAL TITAN Tbk, PTT Global Chemical Public Company Limited, PT Polychem Indonesia Tbk, and TORAY INDUSTRIES, INC., among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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