JAKARTA; Indonesian plastics manufacturers have been unable to operate at full capacity in recent months, with average utilisation reaching only 60 to 70 per cent, as cheaper imported products, particularly from China, intensify competition and put pressure on local producers.
The Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas) said domestic factories were struggling to operate optimally amid growing competition from cheaper imports.
"At present, our capacity is low. This means our factories cannot operate at full capacity," Inaplas chairman Suhat Miyarso said after a meeting with the Industry Minister on Thursday, as quoted by Kompas.
He attributed the situation partly to imported products being sold at lower prices than domestically manufactured goods, calling on the government to introduce measures to curb imports and provide greater protection for local producers.
"If imports can be reduced, I believe we can return to operating at 100 per cent capacity," he said, adding that its members were seeking to raise domestic manufacturers' capacity utilisation to 80 to 90 per cent, allowing local producers to meet more of the country's demand for plastic materials.
Industry Minister Muhammad Sarmuji acknowledged that capacity utilisation across the manufacturing sector remained below optimal levels and said the government was examining the factors behind the slowdown and possible solutions.
"We will look for solutions, identify the factors behind the problem and determine which parties we need to coordinate with to address it," he said at the same occasion.
The ministry will also assess the challenges facing the domestic plastics industry and identify issues requiring coordination with other government institutions.
Sarmuji said the government could consider trade protection measures, including Indonesian National Standards (SNI) certification requirements and anti-dumping duties, if investigations found that cheaper imports were undermining domestic manufacturers.
He also called on stakeholders to support the development of domestic industries, including plastics manufacturers.
The pressure on local producers comes despite positive growth in the broader chemical industry.
Statistics Indonesia (BPS) recorded 8.1 per cent year-on-year growth in the chemical, pharmaceutical and traditional medicine industry in the third quarter of 2026.
Meanwhile, petrochemical producer PT Chandra Asri Pacific (TPIA) said cheaper Chinese imports remained a challenge despite Indonesia's manufacturing activity expanding in October.
Chandra Asri's human resources and corporate affairs director, Suryandi, said the domestic petrochemical sector was growing at around 6 per cent, roughly in line with GDP growth.
Domestic demand remained strong, but local manufacturers supplied only around 60 per cent of national petrochemical needs, leaving Indonesia a net importer.
He attributed Chinese products' price advantage partly to government support, including access to cheaper raw materials, while domestic producers had to secure their own supplies.
Suryandi said import policies should take domestic production capabilities into account to protect locally manufactured products.
Chandra Asri is seeking to reduce import dependence through its planned Chlor Alkali-Ethylene Dichloride (CA-EDC) project, designated a national strategic project under the government's 2026 Work Plan.
As of November, construction had reached around 85 per cent, with full operations targeted for 2027.
In March, state asset fund Danantara, along with the country's sovereign wealth fund Indonesia Investment Authority (INA), signed an investment agreement to jointly inject US$200 million into Chandra Asri's CA-EDC project.
The Conditional Share Subscription Agreement (CSSA) follows up on a memorandum of understanding signed in June last year. - Jakarta Post/ANN
