JAKARTA: The plastic packaging industry is benefitting from delivery services, a market that has grown rapidly as consumers shop from home to reduce the risk of catching Covid-19.

       Booming food and beverage delivery services are making up for the losses plastic packaging manufacturers had sustained as a result of the reduction in plastic bags used in supermarkets, according to Fajar Budiono, secretary-general of the Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas).

       “At the start of the pandemic, and because of a ban on plastic (bags), there was a decline,” Fajar told The Jakarta Post.

       “But (demand) has now recovered in the new market of delivery services.”

       With the pandemic compelling many people to stay at home, the gross merchandise value of the Indonesian food and delivery market is estimated to have risen by 183% to US$11.9bil (RM49.9bil) in 2020, Singapore-based tech consultancy firm Momentum Works said earlier this year.

       Indonesia is the largest market for such services in the region.

       The plastic packaging industry has also benefited from an increased use of plastic bags at traditional markets, said Fajar, as some sellers had begun to put chilies in plastic bags of 50g or 100g to minimise contact with customers.

       Previously, sellers would usually let customers decide how much they wanted, weigh the chilies and then place them in a plastic bag. The e-commerce boom, meanwhile, had led to an estimated increase between 10% and 20% in demand for plastic bubble wrap, Fajar added.

       However, capacity utilisation was still only 80% of the normal level, Fajar explained, partly because of restrictions imposed by the government on the number of workers allowed to work at any given time, even though the industry was considered essential as it supported food and beverage businesses.

       That marks a rebound from just half of the normal capacity utilisation in the February-to-April period last year.

       Before the pandemic, plastic bag production exceeded 600,000 tonnes a year, according to an estimate from Inaplas.

       “People suddenly could not move about, so there was a slight decline (in sales),” Fajar said when asked about the impact of the most recent emergency curbs. “But we expect sales to start normalising again.”

       Consultancy company Wood Mackenzie estimated that plastic packaging production in Indonesia had contracted 1.9% last year, reversing the 4.4% growth seen in 2019.

       But as the world moves to eliminate unnecessary plastic and improve its recyclability, up to one-fifth of the demand for polymers in packaging is expected to be displaced by efforts to eliminate, substitute or reuse packaging by 2050, according to Wood Mackenzie research director Guy Bailey.

       That figure is estimated to be equal to 20 trillion drinking bottles.

       “While the pandemic benefited some sectors in the short term, this effect is likely to be eroded in the medium-to-long run by these broader trends running through the industry,” Bailey told the Post in an email.

       The government has also been considering a duty on plastic products as part of a tax reform this year, but it is currently reviewing the plan, including the rate.

       “We are still reviewing it together with the Fiscal Policy Agency, related agencies and ministries. Many factors must be taken into account, including the potential,” Askolani, the customs and excise director general at the Finance Ministry, told the Post in a text message. — The Jakarta Post/ANN