Indonesia Plastics Market Research Report: Forecast (2024-2030)

Market Definition

Synthetic polymers are categorized as ‘plastics’ made from various organic compounds obtained mainly from petroleum and natural gas. Their adaptability, durability, and ease of manufacture make them indispensable in modern life. These synthetic materials undergo polymerization to form chains or networks by chemically linking smaller units called monomers. This molecular structure results in flexible, strong plastic with resistance to decay. Many variations exhibit different features, including lightweight construction, corrosion resistance, and the ability to mold into intricate forms. Such versatility of plastic offers numerous advantages for everyday use.

Market Insights & Analysis: Indonesia Plastics Market (2024-30):

The Indonesia Plastics Market size is estimated to grow at a CAGR of around 6.5% during the forecast period, i.e., 2024-30. The Indonesian market exhibits a robust growth trajectory, propelled by consistent economic expansion. This upward trend fosters a heightened demand for plastics across diverse sectors, including packaging, construction, automotive, and consumer goods.The growing industries fuel the consumption of plastic products, further amplified by Indonesia's notable urbanization. With a rapidly growing urban population, the need for plastic intensifies, particularly in construction, infrastructure development, and consumer goods.

Plastics play a pivotal role in urban development, being extensively utilized in building materials, pipes, and packaging. Notably, the packaging sector emerges as a major consumer of plastics, driven by the surge in e-commerce and modern retail formats. The market favors plastics, especially flexible packaging, due to their cost-effectiveness, durability, and efficacy in product protection. These dynamics underscore the pivotal drivers shaping Indonesia's plastic industry landscape.

In addition, the market analysis reveals that plastic remains a prevalent choice for aseptic packaging, largely due to its superior barrier properties, adaptability, lightweight construction, cost efficiency, transparency, and dependable attributes, along with continuous advancements. However, the escalating environmental apprehensions linked to plastic waste have prompted a surge in the pursuit of sustainable alternatives. Lamipak, a leading figure in providing high-quality solutions for aseptic packaging, has strategically announced plans to establish a second manufacturing facility in Indonesia, earmarking a substantial investment totaling USD 160 million in May 2022. This move is poised to fortify the plastic industry, thus exerting a significant influence on Indonesia's plastic demand throughout the forecast period.

Moreover, Indonesia's manufacturing landscape exhibits promising growth, notably in sectors like automotive and electronics, which heavily leverage plastic components for diverse applications spanning automotive parts to electronic casings. This reliance underscores the pivotal role of plastics in driving innovation and meeting consumer demand. As Indonesia's middle-class burgeons and consumer preferences pivot, the appetite for plastic consumer goods surges, spanning from household essentials to electronics. Moreover, the robust investment inflow from both domestic and international players into Indonesia's plastics industry catalyzes technological strides, amplifies production capabilities, and augments the array of plastic offerings that saturates the market. This dynamic interplay between industry growth and consumer dynamics positions Indonesia as a pivotal player in the Global Plastics Market.

Indonesia Plastics Market Driver:

Growing Demand from the Packaging Industry Driving Market Growth & Expansion – Plastics are crucial in the packaging industry as they offer numerous benefits that drive market growth, including exceptional wear and chemical resistance, ease of shaping, recyclability, puncture resistance, and high mechanical strength. Indonesia favors polyethylene terephthalate (PET) for its outstanding characteristics when it comes to packing applications. Plastics reign supreme across industries like food retailing and pharmaceuticals thanks to features such as lightweight design adaptability, easy maintenance, and moisture protection capabilities, making them superior alternatives compared with other materials.

Furthermore, PET plastic boasts properties that make it an excellent choice, particularly for food packaging, because of its low handling risks, minimal toxicity, and absence of bisphenol A(BPA) or heavy metals, which guarantee safety standards. Additionally, pharmaceutical companies can’t function without using plastics due to their versatility in critical areas like blood bags, syringes, nebulizers, and medicine bottles, amongst others. Notably, Indonesia's rising population fuels pharmaceutical advancements, consequently escalating plastic consumption within the nation, thereby further driving the market forward.

In addition, plastic packaging usage is on the rise within Indonesia's e-commerce sector. For instance,

• As per the report by Agriculture and Agri-Food Canada, e-commerce sales at the retail level in Indonesia experienced a sharp rise to USD 48.1 billion in the year 2022 and are anticipated to witness an upsurge reaching USD 90.5 billion by the end of the year 2026.
• According to the United States Department of Agriculture, the value of packaged food sales in Indonesia's retail market grew from USD 33.5 billion in 2021 to USD 38.2 billion in 2022.

This trend, which shows the growing consumption of plastics in food packaging within the country, is expected to continue in the coming years as well.

Indonesia Plastics Market Challenge:

Government Strict Regulations on Plastic Usage & Over-Reliance on Imported Raw Materials Impeding the Market Expansion – The plastic market in Indonesia is facing a dual challenge caused by strict government regulations on plastic usage and a heavy reliance on imported raw materials. The implementation of regulatory measures like the prohibition against single-use plastics and restrictions imposed on packing using such material has led both local and international manufacturers to reconsider their operations. Although important for ecology, this legislative landscape brings logistical challenges that companies must navigate to ensure compliance while managing financial aspects.

Moreover, relying heavily on outsourced resources amplifies vulnerabilities, exposing markets to fluctuations due to supply chain disruptions or volatile global prices. To overcome these issues, stakeholders need to focus on developing innovative sustainable solutions that invest domestically, enhance production capabilities, lobby policymakers, and jointly create practical legislation balancing ecological concerns with economic viability.

The Indonesian plastics market is confronted with a major impediment in adhering to strict government regulations designed to minimize environmental damage. The marketplace has undergone significant changes due to the implementation of limitations on single-use plastics, along with mandates for efficient waste management and support for recycling initiatives. In 2020, under the leadership of the Indonesia National Plastic Action Partnership (NPAP), a fusion plan was put into action aimed at reducing marine plastic leakage by 70% by 2025 while also aiming toward achieving complete eradication of plastic pollution through transitioning towards circular economy principles by 2040. Accomplishing both regulatory compliance and sustainable innovation goals presents an intricate challenge that demands swift attention from stakeholders involving various industries.

Indonesia Plastics Market Trend:

Rising Demand for Eco-Friendly Recycled Plastics Gaining Traction – The Indonesian plastics industry is witnessing a notable shift driven by the increasing demand for eco-friendly plastics, marking a significant trend in consumer behavior. This shift is primarily fueled by growing environmental awareness and concerns about plastic pollution. Consumers are increasingly opting for sustainable alternatives, such as biodegradable plastics and products made from recycled materials. As a result, manufacturers and suppliers are adapting their strategies to cater to this rising demand for eco-friendly options, investing in research and development to innovate sustainable packaging solutions, and exploring renewable resources. This trend not only reflects a growing consciousness towards environmental sustainability but also presents opportunities for businesses to align with evolving consumer preferences and contribute to the reduction of plastic waste in Indonesia's ecosystem. For instance,

• In 2023, Solinatra and ATMI IGI collaboratively launched a Center of Excellence in Surakarta, Indonesia, to perform R&D activities on transitioning from plastics to natural, eco-friendly biodegradable bioplastics. This partnership promotes Indonesia’s bioplastic shift.

In recent years, the alliance between Siegwerk and Project STOP has emerged as a noteworthy market trend to combat plastic pollution, with Indonesia being the foremost focus. Being a key player in the global packaging sector, Siegwerk's partnership emphasizes its unwavering commitment to sustainable waste management systems. By joining hands with Project STOP, the trailblazing project jointly founded by Borealis and SYSTEMIQ, Siegwerk proactively addresses ecological concerns while promoting the adoption of circular packaging practices. This dynamic cooperation signifies an industry-wide impetus toward devising efficacious measures against plastic leakage while moving closer to achieving the goals of creating a closed-loop economy model. Thus, the commitment of market players to meet the rising demand for eco-friendly recycled plastics is anticipated to augment the size & volume of the Indonesia Plastics Market in the coming years.

Indonesia Plastics Market (2024-30): Segmentation Analysis

The Indonesia Plastics Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024-2030 at the national level. According to the analysis, the market has been further classified as:

Based on Plastics Molding Technology:

• Injection Molding
• Extrusion Molding
• Blow Molding
• Others

Injection molding technology leads the Indonesian plastics market in terms of market share and value, exemplifying its dominance across various sectors. The process involves melting a thermoplastic polymer and injecting it into molds, producing various products from household items to packaging materials. Injection molding has expanded in Indonesia due to the high demand for strong yet lightweight goods. This method's rise is significant in pharmaceutical manufacturing as well. With USD 4.4 billion worth of imports in the past few years, injection molding has seen substantial growth potential within the sector.

Moreover, automotive production showcases an increased appetite for molded parts, exemplified by Indonesia's output rising from last year’s level by approximately 65%, resulting in a total of 1.5 million vehicles produced, according to reports compiled by the Organization Internationale des Constructeurs d'Automobiles (OICA). These trends indicate that there will be numerous opportunities available regarding injection molding technology within Indonesia's ever-changing market landscape during the forecast period.

Based on Application:

• Packaging
• Electrical and Electronics
• Building and Construction
• Automotive and Transportation
• Furniture and Bedding
• Others (Houseware)

The Indonesian Plastic Market boasts a robust demand for packaging, making it one of its largest growing segments in terms of market share. Plastic packaging finds extensive utilization across various sectors, notably in the food and beverage industry, alongside household products and personal care items. This pervasive usage is underpinned by several key factors: the nation's burgeoning population, rapid urbanization trends, and a simultaneous uptick in consumer expenditure on packaged goods. In 2024, Coca-Cola Indonesia launched new packaging made of 100% recycled PET (rPET), excluding caps and labels, in line with its vision of a World Without Waste. Such dynamics paint a picture of sustained growth and opportunity within the Indonesian plastic packaging market, with its trajectory closely aligned with broader demographic and economic trends.

Indonesia Plastics Industry Recent Development:

• In 2023, PT ALBA Tridi Plastics Recycling Indonesia, an ALBA Group Asia company, signed a USD 44.2 million blue loan agreement with the Asian Development Bank (ADB) to establish a polyethylene terephthalate (PET) recycling facility in Central Java.
• In 2022, Toyobo revealed a commitment of USD 73.2 million to establish a fresh polyester film packaging facility at Pt. Trias Toyobo Astria (TTA) in Indonesia. This expansion bolsters the company's foothold in the market.

Gain a Competitive Edge with Our Indonesia Plastics Market Report

1. Indonesia Plastics Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
3. Indonesia Plastics Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.