Sales in Indonesia's plastic industry are expected to rise 6.5 percent to 4.3 million tons (roughly USD $8 billion) in 2016 supported by rising plastic and plastic products demand in those industries that use these materials (for example, Indonesia's food & beverage industry and the automotive industry). Fajar Budiono, Secretary General of the Aromatic, Olefin and Plastic Industry Association (Inaplas), said the year 2016 should be a good one for the plastic industry as the economy of Indonesia has started to stabilize after a prolonged slowdown.

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Three Indonesian sectors are expected to be negatively affected by the government's proposal to impose an excise tax of at least IDR 200 (approx. USD $0.02) on plastic bottles and packaging. These three sectors are the food & beverage sector, the packaging sector, and petrochemicals. Last week, the Indonesian government unveiled its plan to introduce a new excise tax in an effort to collect additional tax money, while protecting the environment as the tax should lead to a reduction in consumption of plastic products. However, the plan led to fierce criticism from dozens of industry associations.

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Indonesia's exports of plastics and plastic products fell 18.5 percent year-on-year (y/y) in 2015 to USD $2.25 billion from USD $2.76 billion in the preceding year. This decline was caused by weak global demand for plastic, falling selling prices and the low competitiveness of Indonesia's plastics and plastic products. Also in terms of volume Indonesia's plastic exports declined. Based on the latest data from Indonesia's Trade Ministry, the nation's plastics export volume fell 5.58 percent (y/y) to 1.39 million tons last year.

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