Packaging industry players hope to see sales growth figures return to 10 percent next year on the back of the vast untouched market outside Java Island after sluggish growth this year amid a weak global and domestic economy.

“We hope to see sales back to 10 percent growth again next year given the big market we’re in and the production capacity that is still under-utilized now,” said Henky Wibawa, Indonesia Packaging Federation (IPF) executive director, at the “Indoplas, Indopack and Indoprint 2016” plastic, packaging and printing industry exhibition at JIExpo on Thursday.

However, infrastructure and business quality need to be improved outside of the nation’s economic center of Java, such as on the islands of Sumatra and Sulawesi.

“Small and medium enterprises [SMEs] in regions need to improve their packaging but infrastructure and other factors hinder us from getting there so we need to do something about it,” he added.

Henky also suggested that technology innovation could be used to boost packaging sales, specifically by creating a mobile application, similar to popular taxi-hailing app Uber or Go-Jek, but for business owners to order packaging in an instant. “We can call it ‘Go-Pack’.”

Not immune to the global economic slowdown, Indonesia’s economy has also weakened over the past few years and the packaging industry has been hit by weak demand, with sales increasing by only 7 percent on average. In 2010, sales grew by 11 percent on average.

For 2016, the federation projects that the industry could grow by 5 to 6 percent to US$6.2 billion, slower than last year’s 7 percent with an estimated $5.9 billion in sales.

The reason for the lower prediction is lower demand in the beginning of the second semester after higher demand in the previous semester, especially entering Idul Fitri.

“In the second semester, the factory utilization rate dropped to 60 to 70 percent while last semester we saw 80 to 90 percent. There has also been no new expansion in the packaging industry during this time,” Henky said. “This may show that the economic crisis has not ended yet, secondly the government’s policies to ease investment have yet to significantly affect the industry.”

The economic crisis has also hit the packaging industry’s sister industries: plastic and printing. Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas) projects the plastic industry’s output will grow by only by 3 percent to 4.6 million tons this year, however the industry still enjoys a high profit margin thanks to a drop in raw material prices due to lower oil prices.

Indonesia Printing Companies Association (PPGI) notes flexible printing — printing on easily molded media such as plastics and aluminum foil — grew by 7 percent in average thus far this year while paper printing by 5 percent.

PPGI chairman Jimmy Juneanto said 65 percent of printing industry sales came from industrial demand while 35 percent from retail and government projects, so when disbursement for school-book printing slowed in the first semester, for example, it affected the industry as well.

From Sept. 7 to 10, almost 400 plastic, packaging and printing firms are displaying their products and services at the exhibition at JIExpo in Kemayoran, Jakarta.

The biennal event is joined by major printing companies such as HP, Heidelberg and Komori as well as machinery firms that produce plastics and shapes, and cut and fold various materials, ranging from cartoons, fabrics, sponge, tins to glass.

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