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View all search resultsPlastic packaging costs surge due to Iran war, squeezing food producers
Industry players estimate that packaging costs in the bottled water industry could increase by as much as 45 percent if supply disruptions persist.
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Empty water gallons are seen outside a refilling outlet in this undated photograph in BSD City, South Tangerang, Banten. (JP/R. Berto Wedhatama)
I
ndonesia’s food and beverage industry has begun to feel pressure from rising costs of production-supporting materials, particularly packaging inputs, as the widening impact of tensions in the Middle East disrupts global petrochemical supply chains.
The Nusantara Bottled Water Companies Association (Amdatara) said producers of bottled drinking water (AMDK), were already preparing to cut spending as raw material prices increase.
“Oil itself is the main raw material in the production of plastic packaging such as bottles or gallon containers used by the bottled water industry, while plastic packaging represents the largest cost component in the AMDK industry’s cost structure,” Amdatara chairman Karyanto Wibowo said on Sunday, as quoted by Kontan.
He added that any increase in petroleum-derived inputs would inevitably push producers to seek efficiencies in order to remain competitive.
Amdatara estimates that packaging costs in the bottled water industry could increase by as much as 45 percent if supply disruptions persist.
Similarly, Chairman of the Indonesian Food and Beverage Producers Association (GAPMMI) Adhi Lukman said manufacturers had begun receiving notices from suppliers about higher packaging prices.
Some plastic-based materials have also become harder for producers to obtain.
