Market Trends of Indonesia Polypropylene Industry
This section covers the major market trends shaping the Indonesia Polypropylene Market according to our research experts:
The Packaging Industry Promotes the Demand for Polypropylene
- Polypropylene is a food-grade plastic ideal for manufacturing processes that require high heat. It can be used in a wide range of packaging applications. Food products that use polypropylene for packaging include yogurt, cream cheese/sour cream, ready meals, and vacuum skin packaging (VSP) containers. Due to its high melting point, polypropylene is a popular container for microwave use.
- Recent concerns and pressures to develop sustainable and recyclable food packaging, as well as health and safety concerns related to the use of polystyrene (PS) in food packaging, have led to the use of polypropylene materials in various food packaging and processing applications.
- Indonesia's packaging industry plays a vital role across all industries and companies. Packaging has become one of the factors that determine the competitiveness of domestic industrial products.
- In recent years, the packaging industry has grown at a rate of 6-7% (Year over Year), with a value of IDR 104,728 billion (USD 6.72 billion) in 2021. The packaging industry was not impacted during the COVID-19 pandemic.
- The beneficial properties of polypropylene plastics enable the production of various types of food and beverage packaging, from foils to jars, tubs, bottles, bottle caps, lids, and labels. Due to the diversification of packaging types and increasing competition in production and processing costs, polypropylene is now the primary packaging material for many individual items in the consumer's daily diet.
- The outlook for the food and beverage (F&B) industry remains optimistic and is expected to grow by 7% in 2022, according to the director general of agribusiness at the Ministry of Industry.
- The F&B sector contributed 38.38% to Indonesia's GDP, making it Indonesia's largest sub-sector contributing to GDP.
- All the aforementioned factors are expected to drive the packaging industry, which may also impact the demand for the Indonesian polypropylene market during the forecast period.
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Automotive Industry is Expected to hold a major share
- The automotive industry in Indonesia plays an important role in the country's economic growth, contributing 10.16% of the GDP. Exports of automotive products from Indonesia are currently worth more than their imports.
- Polypropylene is the most commonly used plastic in automobile manufacturing. According to the Plastics Trade Association, in 2022, among the various types of plastics used in the production of cars, the highest share is held by polypropylene, accounting for 32% due to its properties, such as resistance to impact, heat and moisture. Moreover, it finds application in bumpers, canisters, and seat panels.
- Polypropylene is a thermoplastic polymer used in a wide variety of applications. A saturated addition polymer made from propylene monomer is robust and unusually resistant to many chemical solvents, bases, and acids.
- Polypropylene is also used in car bumpers and wheel covers. It is also used in chemical tanks, cable insulation, and carpet fibers.
- The expansion of the automotive industry corridor from East Jakarta to Subang in West Java will contribute to production efficiency and thus support the polypropylene market.
- Therefore, all the factors mentioned above are likely to provide the increasing demand for the Indonesian polypropylene market during the forecast period.
