Market Trends of indonesia adhesives Industry
The government initiatives to promote paper and paperboard packaging will escalate the industry size
- The packaging is mainly used for protection, containment, information, utility of use, and promotion. This makes packaging an integral part of most industries. The growing Indonesian market is expected to boost packaging usage and register a CAGR of 4.33% during the forecast period. In 2017, packaging usage accounted for 143.46 million tons of packaging, including paper and paperboard and plastic. Due to COVID-19, in 2020, the market registered a negative growth of -5.77%, and this was due to disruption in the supply chain, shortage of packaging material, restrictions on the import and export of goods, and factories operating at low capacity.
- In 2021, the market registered a positive growth of 4.28%, with 153.41 million tons of packaging material used for various purposes. It is expected that the packaging industry will keep growing as there has been a rise in the e-commerce sector which has given a significant boost to the packaging industry in the past few years as special packaging is required for shipping goods.
- The government of Indonesia has taken steps toward the use of plastic, as Indonesia is the second-largest contributor of plastic waste in the ocean after China. The extended producer responsibility (EPR) regulation imposed by the Indonesian government will oblige producers and retailers to redesign their product packaging to have a higher proportion of recyclable material. This will encourage manufacturers to use paper and paperboard as the base material for the packaging, which will increase the volume of adhesives used in the packaging process.
- In today's competitive market of consumer products, it has become inevitable for companies to use attractive packaging to stand out from their competitors and maintain their brand value in the market.
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Considerable growth of export values for automotive parts & components will proliferate the industry growth
- The automotive industry in Indonesia remains a promising sector that contributes significantly to the country's economic progress. According to Agus Gumiwang Kartasasmita, Minister of Sector Republic of Indonesia, the automobile industry in Indonesia witnessed tremendous growth in 2021, with a double-digit growth rate of 17.82%. In 2019, the country produced about 12,86,848 units of vehicles which drastically reduced to 6,90,176 units in 2020, accounting for a decline of about 46% owing to the COVID-19 pandemic. Due to this reason, the variation in automotive production between 2019 and 2021 resulted in about -13%, whereas between 2020 and 2021, the variation was about 63%.
- The trade in the automotive sector in Indonesia showed a surplus in all years from 2019 to 2021. Both exports and imports fell in 2020 as a result of the global pandemic, which generated limitations and disruptions in economic activities, so impeding the global supply chain and hurting total production. However, in line with the robust output in 2021, both export and import values increased significantly, with a trade balance of USD 1.93 billion. Although 2021 had the highest level of commercial activity in the prior ten years, the trade balance surplus was the lowest in comparison to 2019 and 2020, which had balance values of USD 2 billion and USD 1.95 billion, respectively.
- Globally, the development of EVs signaled a fundamental shift in the Indonesian transportation sector's policies. Given the country's nickel reserves, Indonesia is well-placed to become a major player in the global EV supply chain. To be a part of the region's EV future, Indonesia needs to invest in technology, talent resources, renewable energy, and infrastructure.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Growing demand from civil aviation will likely boost the need for light aircraft
- Significant foreign investments will impetus the growth of the footwear industry of the country
- Government & public investments in residential and non-residential construction projects will boost the industry
- Rise in export of wooden furniture to the Western countries will aid the industry growth
