The Ministry of Industry has intensified monitoring of global geopolitical tensions, including developments in the Strait of Hormuz, which may disrupt petrochemical raw material flows and Indonesia’s plastic industry supply chain (16/04). The government has brought together upstream petrochemical industries, intermediate producers, downstream manufacturers, and recycling players to discuss current conditions and mitigation measures.

The meeting focused on maintaining Indonesia's plastic supply chain stability through coordinated action across all industry segments.

Industry Reports Stable Plastic Stock Despite Global Supply Risks

Minister of Industry Agus Gumiwang Kartasasmita stated that industry participants expressed optimism regarding domestic plastic stock availability during the coordination meeting held in Jakarta on Thursday (16/04).

He said, “From the results of the meeting, we received assurances from industry that plastic stock should not be a problem. I underline the word should, because the government will continue to closely monitor global developments that may impact production and stock in this subsector.”

The statement reflects industry confidence that current supply conditions remain stable, despite global uncertainties.

Geopolitical Tensions Cause Longer Shipping Times and Higher Costs

The Ministry noted that geopolitical tensions in the Strait of Hormuz have caused disruptions in logistics and pricing structures within Indonesia’s plastic industry supply chain (16/04).

Shipping time for raw materials, which previously averaged around 15 days, has increased to up to 50 days. This condition has also contributed to higher freight costs, port surcharges, and increased production expenses for manufacturers.

According to the Minister, these disruptions have created distortions in domestic plastic pricing and supply chain efficiency.

Government Pushes Petrochemical Independence and Raw Material Diversification

The Ministry emphasized that current global conditions highlight the importance of strengthening Indonesia’s petrochemical industry independence (16/04), particularly by reducing reliance on imported raw materials.

One of the options discussed is the potential use of alternative domestic feedstock sources, including crude palm oil (CPO). While currently considered less competitive in terms of cost, it is being reviewed as part of a long-term diversification strategy.

The government stressed the importance of evaluating national resource potential to support industrial resilience and reduce import dependency.

Industry Calls for Stronger Market Protection and Investment Appeal

During the meeting, investors highlighted the need to enhance the attractiveness of Indonesia’s petrochemical sector for new investment (16/04), including stronger protection of the domestic market from imported products.

The government reaffirmed its commitment to balancing national energy needs with industrial raw material demand, including for the petrochemical sector.

Stakeholders also emphasized the importance of ensuring access to quality raw materials that can improve competitiveness for both companies and products in the market.

PHOTO: PEXELS

This article was created with AI assistance.

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