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Govt aims to slash plastic imports by half in five years

Indonesia imported a staggering US$20 billion worth of plastic as intermediary goods and manufacturing ingredients in 2018.

Rachmadea Aisyah (The Jakarta Post)
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Tue, July 16, 2019 Published on Jul. 16, 2019 Published on 2019-07-16T12:49:57+07:00

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Govt aims to slash plastic imports by half in five years An employee uses a walkie-talkie at the industrial compound of Chandra Asri Petrochemicals in Cilegon, Banten. The company produces raw materials for the production of plastics. (Antara/Asep Fathulrahman)

T

he Indonesian government plans to halve the imports of industrial-use plastics in the next five years by encouraging more investors to enter the plastic manufacturing industry in the country.

The increase in local plastic production would also help improve the country’s manufacturing capability and reduce imports. 

Indonesia imported a staggering US$20 billion worth of plastic as intermediary goods and manufacturing ingredients in 2018, 10.6 percent of Indonesia’s overall exports, the Industry Ministry’s director general for the chemical, textile and miscellaneous industries, Achmad Sigit Dwiwahjono, said at a manufacturing exhibition on Tuesday last week.

In the same year, the domestic plastic industry grew by a modest 6.9 percent, even though it was far better than the 2.47 percent growth recorded in 2017. It also contributed Rp 92.6 trillion ($6.6 billion) to gross domestic product (GDP), a much smaller figure than imports.

“If we can enhance investments in this sector [...] in the next five years, we hope that we will be able to substitute 50 percent of our [annual] plastic imports with local products,” Sigit said.

He pointed out that the recovery of last year's plastic industry growth was thanks to two major investments by the Korea-based Lotte Chemical Titan, which amounted to $3.5 billion, and Chandra Asri Petrochemicals, which amounted to $4 billion.

In earlier statements last year, Sigit expressed confidence that once the two companies began production in 2023, it would reduce imports of cracked naphtha, which is a main ingredient to make plastics, by 60 percent.

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