The government's decision to free up imports of mono ethylene glycol (MEG) commodities received a positive response from the General Chair of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), Redma Gita Wiraswata. It is hoped that this step will provide encouragement to local industry, in accordance with President Joko Widodo's direction to reduce dependence on imports of consumer goods and raw materials.
On Tuesday, March 12 2024, Redma stated, "This is an improvement step from upstream to downstream, in accordance with President Joko Widodo's direction so that we reduce dependence on imported consumer goods and raw materials."
According to Redma, although Minister of Trade Regulation 36/2024 does not prohibit the import of MEG, the government still imposes certain restrictions regarding the import of this raw material. One of them is related to the port for unloading imported goods, which was previously carried out post-border and has now changed to pre-border. However, unloading of imported MEG goods is only permitted at Tanjung Priok Port, Jakarta, while MEG import facilities are at Merak Port, Banten.
Even though local MEG production has been carried out by Polychem Indonesia, the national production capacity is still far from meeting the needs of industrial MEG users, which reaches 600 thousand tons per year. Apart from that, local MEG prices are also higher than imported ones, with a price comparison of up to 35 percent. This makes the price of local MEG reach around USD 700 per ton, while the price of imported MEG is around USD 550 per ton.
Arif Sulistiyo, Director of Imports at the Ministry of Trade, stated that the MEG import exemption is expected to help industries using plastic and MEG raw materials in obtaining raw material supplies. According to him, this policy change is necessary because similar industries in the country are not yet fully able to meet domestic needs. The Minister of Trade Regulation was issued after the government received input from various parties, including the Chamber of Commerce and Industry (Kadin), as well as several business associations such as APSyFI, the Indonesian Downstream Plastics Association, Indonesian Rotokemas, the Indonesian Biaxially Oriented Films Association, and the Association of National Importers throughout Indonesia.
With this step, it is hoped that the fiber and filament yarn industry and other related sectors can continue to grow and develop, support domestic economic growth, and create a more sustainable business environment in Indonesia.