Indonesian polyester factories on brink as raw material shortage bites

Indonesia's polyester industry is facing a major crisis, with numerous factories on the verge of shutting down due to a lack of essential raw materials. Reason: Stringent government import restrictions, causing a critical shortage of mono-ethylene glycol (MEG), a key ingredient in polyester production.

The Association of Indonesian Spun and Filament Yarn Producers (APSyFI) is raising alarm bells, warning that this situation could cripple the entire industry. Exporting countries supplying MEG have reportedly halted shipments as they await clarification on the permits required under the new Trade Ministerial Regulation.

This crisis isn't just impacting polyester production. The industry plays a crucial role in supplying textiles, automotive components, and packaging materials, and its collapse could have a domino effect on these related sectors as well. The wider Indonesian economy also stands to lose. The industry employs thousands of people and contributes significantly to the country's exports. If left unresolved, this raw material shortage could lead to job losses, decreased export earnings, and potential disruptions in various downstream industries.

The situation demands immediate action. APSyFI urges the government to streamline the import permit process and ensure clarity for MEG suppliers. Addressing this bottleneck is critical to prevent the collapse of the polyester industry and safeguard its wider economic impact on Indonesia.