Petrochemical Predicted to Grow 12.9%

Wandrik Panca Adiguna | 28 Desember 2010 05:25 WIB

JAKARTA: The national petrochemical market value is projected at US$3.5 billion for 2011, up 12.9% from 2010, thanks to an increase of 8% in domestic demand and soaring plastic raw material prices.

Secretary General of the Indonesian Olefin, Aromatic, and Plastic Industries Association (INAPlas) Fajar AD Budiyono said demand volume for petrochemical products for 2011 would surge 8% from 2010. In terms of value, demand for petrochemical products, such as polypropylene (PP), polyethylene (PE), polyvinylchloride (PVC), synthetic rubber or polystyrene (PS), and acrylonitrile butadiene styrene (ABS) will reach US$3.5 billion. "In terms of volume, demand will increase 8% next year. In terms of market value, however, demand for domestic petrochemical products will reach US$3.5 billion, up 12.9% from this year's US$3.1 billion," he said yesterday. In the meantime, PP import volume is estimated to drop from 450,000 tons this year to 270,000 tons next year. "That will be attributable to the fact that State Oil Enterprise Pertamina will resume its normal supply to PT Polytama Propindo [PP producer] and that the Pertamina Blue Sky program in Balongan will be finished in June 2011. On the other hand, PE import volume is estimated at 320,000 tons, up by around 8%, assuming crude oil price will be US$90 per barrel." "If crude oil price hits US$100 per barrel next year, just multiply the figure by 20%." He continued 2011 was promising for the downstream petrochemical industry, especially the food and beverage packaging industry, which was projected to grow 15% next year. "It is thanks to the stronger purchasing power triggered by the stronger rupiah exchange rate against the US dollar." Application of SNI To contain imports, told Fajar, the INAPlas had suggested the application of Indonesian National Standard (SNI) to 20 downstream plastic products. He estimated the government would issue SNI for cast polypropylene film (CPP film), sack, tarpaulin, and other flexible packaging products by June 2011. "After that, we will suggest the application of SNI to upstream products." To anticipate the soaring crude oil price, added Fajar, the government would develop a petrochemical industry cluster in East Kalimantan, which would be fired by coal or gas instead of by crude oil. He explained coal and gas were more efficient to produce olefin (ethylene and PE). (wiw)

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