Can Plastic and Rubber Industry Recover from COVID-19?
PT Pamerindo Indonesia held a webinar titled "A Strategy Overview on How Indonesia's Plastics & Rubber Industry Recover Post COVID-19", focusing on the current state of the plastics and rubber industry in Indonesia, its current challenges as a result of the COVID-19 outbreak, and possible strategies and methods to recover once the pandemic is over.
The webinar took place on Wednesday, 8 July 2020 and was run by key players in the industry:
Plastics Packaging Industry in Indonesia
Ariana Susanti from Indonesia Packaging Federation (IPF) brought insights from her association about the Plastics Packaging Industry in Indonesia. Plastic packaging is everywhere around us, from food and beverage to health and personal care, thus making the growth of plastics packaging industry is driven by us as the consumers. However, it is undeniable that during the COVID-19 pandemic, a lot of industry is hit, resulting in the lower supply-demand in the market.
A deeper look into plastic will show us the benefits of using them, especially during the pandemic, for example, a plastic bag life is prolonged by reusing it to keep food sealed in the refrigerator or to contain/wrap waste. In food and beverage delivery service, plastic is considered as the safest and most practical medium to contain food. Plastic food packaging can also increase shelf life and protect the food from virus or bacteria, which then can reduce food waste.
With the high value of plastic in many industries like the automotive, airplane, medical, and container industry, can we live without plastic? Ariana then highlights that the environmental problem we currently face is caused by our behavior, not the plastic material. This behavioral change can be started by focusing to improve waste management system by educating people to sort their waste accordingly. A circular economy approach needs to be applied where we can benefit from recycle technology, stakeholder partnership, and local solutions.
Plastic Recycling Industry Update
On the second presentation, Wilson Pandhika from Indonesia Plastics Recycler Association shared about the Plastic Recycling Industry Update. The condition he found was a weak market demand had been happening since the end of 2019 and worsened this year due to COVID-19, where there was a drop of up to 70% within the market. There was also a disruption in the supply chain with a 54% drop in the absorbed plastic waste by recycling industry in Indonesia from March to May 2020.
The impact on plastic recycling is confirmed by up to 20% labor layoff in the recycling industry while at the same time the labors face higher risk while working due to the booming face mask waste. The implementation of banning the use of plastic bags in Jakarta will most likely slow the recovery of this industry, especially with the environmental friendly definition that disregards recycled material.
Wilson then elaborated the support that the recycle industry expected from the government, namely to help to maintain recycled markets by promoting the usage of recycled plastic products, collaborate with stakeholders to improve the recyclability of plastic products, give fiscal incentives in tax relief, and review the regulation that limits plastic consumption. He concluded that the outlook for Indonesia plastic recycling industry was still promising with more companies committed to using more recycled material in their product packaging.
Plastic Industry Recovery Post COVID-19
Billy Tjang from PT. Bilplast Grapindo as the final speaker in this webinar brought the view of plastic industry recovery post COVID-19. He laid out the outlook for Indonesia in May 2020 where imports dropped to almost 20%, the construction sector dropped up to 4.9%, and customer spending shifted to basic needs only. Despite the situation, some products are still in high demand due to the change of lifestyle, for example even though bottled mineral water consumption is low, there is a significantly high demand for gallon water. A surge of demand is also found in plastic thin-wall food container and non-woven in medical robe, face mask, and face shield.
Billy also detailed the financial impacts from COVID-19 in the industry, namely the 30% drop in productivity, less job order, stuck cash flow within the industry, and less profit to prioritize safety. Still, to grow the industry and market post COVID-19, he encouraged the business owner to thrive by doing innovation for new products, boosting the product sales through the internet, or targeting the new technology especially in the medical sector and food packaging. He closed his presentation by saying that he felt optimistic about the plastic industry in Indonesia.
During the Q&A session, the discussion on the plastic industry continued and was summarized as below:
- The ban on single-use plastic in Jakarta will impact 90% of Micro, Small and Medium Enterprises (UMKM), especially in traditional markets, this then leads to the need to find a better replacement
- The waste management system should be implemented to manage the process of post-used plastics, not only suppressing the pre-used plastic
- A standard in recycling plastic material should be discussed, arranged and implemented soon to absorb the industry and grow the business potential, especially in exporting the waste to other countries as resources
- Start educating the people on a better and proper waste management standard in sorting the plastic waste to recycle the recyclable parts
- Scaling up the circular economy concept and investing in high technology will give benefit to the plastic and waste industry.
Written by Carrina Lim (The Water Agency Indonesia)