Indonesia’s packaging industry is expected to see a revenue increase by 11.1% to IDR40 trillion ($4.36bn) in 2012 compared to 2011, due to strong demand from the end-user industry along with the country’s economic growth.

According to a Indonesian Packaging Association report, plastic-based packaging, flexible packaging and rigid plastic packaging are likely to contribute around 56% of the overall demand. Also plastic-based packaging, which accounted only for around 51% in the past, has now increased.

By 2016, the country’s packaging industry revenue is expected to double, given the stable annual growth rate of more than 10%. A challenge is expected from raw materials supply, of which between 25% and 40% are being imported at present.

Raw materials for plastic packaging accounted for the highest proportion at 40%, out of the total materials imported.

Indonesian Olefin and Plastic Industry Association (Inaplas) vice chairman Budi Susanto Sadiman said the local industry may need around 3mt of plastics this year, an increase of 17.14% compared to 2011.

According to the association’s estimation, imports of plastic raw materials could decrease by 2.62% to 1.19mt in 2012, as several local producers have upgraded or increased the usage rate of their production capacity.

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By GlobalData

Indonesian Packaging Association, business development director Arianna Susanti said the main drivers for the revenue growth include the local food, beverage and pharmaceutical industries.

The food and beverage industry consumes about 70% of the total packaging supply every year alone.

"Demand for the packaging of food and beverages continues to surge and at the same time, product innovation has been developing," said Susanti, citing innovations in the packaging of personal care products, such as shampoo, particularly those targeted at young people.