Key Challenges Facing the Asian Plastics Industry

Asia’s plastic hangover is getting hard to ignore. In the 20 years I’ve lived and worked across Asia, I’ve watched plastics go from convenience to dependence. Coffee, shampoo, soy sauce, detergent, all sold in tiny sachets that seem harmless until you realise how many there are. In the Philippines alone, it’s estimated that 𝐚𝐫𝐨𝐮𝐧𝐝 164 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐩𝐥𝐚𝐬𝐭𝐢𝐜 𝐬𝐚𝐜𝐡𝐞𝐭𝐬 𝐚𝐫𝐞 𝐮𝐬𝐞𝐝 𝐞𝐯𝐞𝐫𝐲 𝐬𝐢𝐧𝐠𝐥𝐞 𝐝𝐚𝐲. That’s nearly 60 billion a year! Enough to wrap around the Earth twice. 𝐄𝐯𝐞𝐫𝐲 𝐲𝐞𝐚𝐫. And the Philippines isn’t an exception. Across the region, the scale is staggering. China, Indonesia, the Philippines, Vietnam and Thailand together account for more than half of all plastic leaking into the world’s oceans. Indonesia alone produces almost 8 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐭𝐨𝐧𝐧𝐞𝐬 𝐨𝐟 𝐩𝐥𝐚𝐬𝐭𝐢𝐜 𝐰𝐚𝐬𝐭𝐞 𝐞𝐚𝐜𝐡 𝐲𝐞𝐚𝐫, much of it uncollected or dumped directly into waterways. These numbers tell a deeper story. Over the years, I’ve seen single-use plastics quietly take over daily life. From street stalls to supermarkets, everything that could be wrapped or bottled eventually was. What started as modern convenience has become an addiction that is clogging rivers, choking coastlines, and showing up in our air, food, and even our blood. This didn’t happen by accident, it has been intentionally orchestrated by the Big Oil. As the world moves away from fossil fuels for energy, oil companies have turned to plastics as their next profit engine. Petrochemical expansion now accounts for almost half of projected oil demand growth to 2050. Behind the scenes, oil and chemical lobbies continue to fund misinformation, block bans, and weaken regulations. Take the Global Plastics Treaty, designed to set legally binding limits on plastic production. After three years of negotiations, progress has stalled again under heavy pressure from oil and chemical-producing nations. The same companies responsible for the pollution are shaping the rules meant to control it. We don’t lack solutions: refill systems, reuse models, smarter packaging, and local innovators are already proving that circular business can also be good business. What’s missing is accountability and political will to stand up to the industries driving this crisis. And let’s not be fooled by the recycling myth. We can’t recycle our way out of this mess. The only real solution is to hold Big Oil and the petrochemical giants legally and financially responsible for every piece of single-use plastic they put out there. Until that happens, every promise of “recyclability” is just another spin of the same cycle. Accountability must start where the pollution starts, at the source.

A new research by Greenpeace East Asia exposes the role of petrochemical industries in South Korea, Japan, and Taiwan in fueling both plastic and climate crises. The production volumes in these three countries contributes to the overcapacity problem in the global petrochemical market. Among the three, South Korea, the host of the fifth Intergovernmental Negotiating Committee (INC-5) meeting for a Global #PlasticsTreaty, has the highest volume at 19.92 million tonnes, followed by Japan at 13.04 million tonnes and Taiwan with 9.02 million tonnes. Collectively, the production capacity of primary plastic polymers from the three markets reaches 41.99 million tonnes annually (approximately 11% of global annual petrochemical production capacity). This is projected to create the equivalent of 99.93 megatons of carbon dioxide equivalent emissions. With 99% of plastics coming from fossil fuels, reducing plastic production and its greenhouse gas emissions is a MUST to end plastic pollution and align with the Paris Agreement. To make this happen, we need a strong legal instrument and regulatory framework that mandates this reduction. Greenpeace is calling for a strong and ambitious agreement that will cut plastic production by 75% by 2040, phase out single-use plastics and enable a just transition to reuse and refill systems. You can read the briefing here: https://lnkd.in/gX7YQ8fK

I love Calbee prawn crackers. I can eat an entire pack at a go. So seeing them go black & white? That's personal. 😱 But the real story is far bigger than snack packaging. Calbee, Japan's largest snack maker, is switching 14 products to monochrome packaging from May 25, because it can no longer source enough petroleum-derived raw materials. Every outlet in Singapore covered this. Most missed what it actually signals. NAPHTHA IS THE STORY Naphtha is not just a printing ink input. It's the upstream feedstock for plastics of all types (polyethylene, polypropylene, polystyrene), PET bottles, food packaging films, synthetic fibres, clothing, medical gloves & tubing, tyres, automotive seals, detergents, fertilisers, pharmaceuticals, adhesives, and photoresist chemicals that etch circuit patterns onto semiconductor chips (not the kind you eat). The Middle East supplies 45% of global naphtha. The Iran conflict has disrupted that supply. The effects are no longer theoretical. Multiple Japanese petrochemical firms have announced production cuts. Korea's Hanwha Total has declared force majeure on naphtha supply. Packaging material costs in Asia have risen 20-30% this month, with some raw material prices up 50% year-on-year. Korea's 13 food industry associations report some packaging material inventory at roughly 2 weeks. Shin-Etsu Chemical, Japan's largest chemical company & a key semiconductor materials supplier, has withheld its full-year forecast, citing naphtha-derived supply constraints and a 13% fall in quarterly operating income. Calbee's monochrome packs are the visible surface of something much deeper. The Board questions worth asking, by sector: 📌FOOD, BEVERAGE & FMCG BOARDS: Are our packaging suppliers in Asia experiencing PE or PP shortages, and is 2 weeks' inventory cover sufficient if supply tightens further? 📌PHARMA & MEDICAL DEVICE BOARDS: IV tubes, blister packs, medical gloves & sterile packaging all rely on naphtha-derived plastics. Do we know our suppliers' feedstock runway? 📌RETAIL & APPAREL BOARDS: Polyester, nylon & synthetic fibres are naphtha derivatives. How exposed are our garment & textile supply chains to a prolonged disruption? 📌AUTOMOTIVE & INDUSTRIAL BOARDS: Synthetic rubber, seals, adhesives & plastic components are all in scope. Have we mapped naphtha exposure beyond Tier 1? 📌SEMICONDUCTOR & ELECTRONICS BOARDS: Photoresist, the chemical that etches circuit patterns onto chips, is naphtha-derived. Do our stress tests include multi-month feedstock outages? Calbee said it openly. Shin-Etsu paused its guidance. Korean producers declared force majeure. The signals are accumulating. The question is whether your Board is reading them before they show up in your numbers, or after. 🔔Like, repost & follow Ooi Keong LEE for more evidence-based perspectives on Board risk, geopolitics & supply chain resilience. #SupplyChainResilience #BoardGovernance #RiskManagement #Geopolitics

🚨 Asia’s plastic crisis is about to hit your balance sheet. The world’s most plastic-dependent region is now facing a material shock. And this time—it’s not about sustainability narratives. It’s about supply disruption, cost inflation, and survival. -Asia’s plastic use exploded from 17 Mt (1990) → 152 Mt (2022) -The region contributes >33% of global plastic leakage -Japan ranks #2 globally in per capita plastic consumption Plastic packaging prices rising ~30% due to raw material shocks. This is not an environmental story anymore. This is a market correction. 💡 What’s actually happening beneath the surface: -Japanese retailers are preparing for no-plastic scenarios -FMCG supply chains are scrambling for alternatives -Malaysia’s dairy sector is already switching to paper cartons -Korean suppliers are seeing surging demand for low-plastic packaging (−80%) Let that sink in. This isn’t ESG ambition. This is forced adaptation. 🔻 Real market signal: When supermarkets start asking, "How do we sell if packaging disappears?" You’re no longer in a sustainability transition. You’re in a supply chain crisis. ✍️ We need to understand: -Plastic dependency ≠ cost efficiency -Material resilience = competitive advantage Or even more brutally: -Cheap plastic today = expensive disruption tomorrow 💡 A Southeast Asian FMCG exporter recently lost shelf space in a key international market—not because of product quality… But because their packaging failed compliance expectations + supply reliability. -No packaging = No product. -No product = No market. 📊 The deeper truth most leaders are missing: This shift is not “plastic → paper.” It is: ➡️ Linear → Circular systems ➡️ Cheap materials → Secure materials ➡️ ESG optics → Supply chain resilience ✊ Reality check for every boardroom: -If your packaging strategy is still driven by cost per unit—you are already behind. -If your material sourcing isn’t diversified—you are exposed. -If your decarbonization doesn’t include packaging—you are invisible to the next wave of regulation. If your ESG report looks polished but your packaging depends on unstable plastic supply, you’re not sustainable. You’re vulnerable. If you’re ready to move from material dependency → material strategy, let’s connect Earthood #Decarbonization #NetZero #CarbonAccounting #Scope3 #ClimateAction #Packaging #FMCG #SupplyChain #CircularEconomy #Earthood

Trade flows in #petrochemical markets, notably for polyethylene terephthalate (#PET) and polyvinyl chloride (#PVC), are expected to shift amid geopolitical tensions and long-standing oversupply from Chinese producers that has eroded margins and driven prices down. #Tariffs on PET imports into the US were reintroduced on 5 September, which will weigh on major Asian exporters such as Taiwan, South Korea, Thailand, Vietnam, Pakistan and Malaysia. Exporters will need to seek alternative markets, such as the EU and Brazil, but there is also a risk of backflows into Asian markets. #India ’s anti-dumping duties (#ADD) ruling on PVC imports is also expected to shift global trade flows amid demand growth in the country. The duties will impact China and the US the most, with a median rate well above $100/tonne. Chinese exporters in particular will need to seek export outlets once India becomes closed off, and Asian buyers and sellers alike are bracing for a potential deluge from China. PVC exports are thus likely to flow into the #MiddleEast – where demand growth remains limited – as well as the #EU. At the same time, Vietnamese and Middle East producers may import more from India to fill the gap left behind by Chinese and US exports. #ICIS #petrochemicals #trade #PET #PVC #US #tariffs #India #ADDs #China #EU #MiddleEast https://lnkd.in/d54rdzmk

EXCERPTS: South Korean chemicals companies are racing to tap new markets after racking up hundreds of millions of dollars in losses in the face of a deluge of capacity from China, their biggest market. Reliant on exports, firms including LG Chem Ltd. and Lotte Chemical Corp. are feeling the pinch as new plants in Asia’s biggest economy exacerbate a global glut and squeeze margins. And it looks like more pain is set to come for the Korean petrochemicals sector, which saw exports drop more than 15% in 2023 before rebounding modestly last year. The fortunes of these chemical and plastics makers have turned in recent years. Where once they rode the coattails of China’s explosive growth and insatiable appetite for imports, pushing aside rivals from Japan, they now face an oversupplied market and collapsing production margins as Beijing builds out its own industry. “China is rapidly expanding its production of polyethylene and polypropylene, reducing its reliance on Korean imports and even exporting to other countries in Asia and South America”. Global production capacity for chemicals such as ethylene and propylene — precursors in plastics production — is set to grow by near-record levels this year, with the vast majority being built in China. Chinese producers have other advantages apart from newer facilities that are often more tightly integrated in the oil processing chain. They are able to tap cheaper feedstocks, including naphtha and methanol, from sources that are less accessible to their Korean counterparts.

Did you know? Southeast Asia generates over 31 million tonnes of plastic waste every year — yet only a fraction is properly recycled. Indonesia alone discards over 7.8 million tonnes annually, making waste management one of the most urgent sustainability challenges of our time. ♻️ Tackling this head-on, I had the privilege of meeting two key partners in Jakarta today in my role as Chairperson of the Southeast Asia Recycling Coalition. Each play a crucial role in shaping the region’s circular economy agenda. 🔹 Meeting with Indonesia National Plastic Action Partnership (NPAP), World Resources Institute (WRI) Indonesia: Indonesia’s government is revising its Extended Producer Responsibility (EPR) regulation, which has huge implications for waste reduction. With NPAP, we explored: ✅ How industry can contribute to shaping a more effective, realistic EPR framework ✅ Bridging policy gaps, especially around Indonesia’s fragmented waste processing infrastructure ✅ Collaboration opportunities like joint workshops and knowledge-sharing to turn commitments into action A big thank you to NPAP for leading crucial partnerships, including their insightful Financing Roadmap to Reduce Plastics Pollution. Your work makes a real impact! 🔹 Meeting with Satvinder Singh - Deputy Secretary-General for ASEAN Economic Community, The ASEAN Secretariat: This conversation zoomed out to the bigger picture of how Southeast Asia can create a harmonised, effective recycling system. Some key takeaways: 🌱 Regional EPR standards: Aligning policies across ASEAN for better waste management 🤝 Public-private partnerships: Industry must work with policymakers to ensure real-world solutions Kudos to the ASEAN Secretariat for spearheading initiatives like the ASEAN Framework for Circular Economy. Your leadership is critical in making sustainability a reality! 💡 The Road Ahead The challenge is big, but the opportunity is bigger. If we get this right, we can transform Southeast Asia’s plastic problem into a circular economy success story. Would love to hear from you: what’s the biggest barrier to recycling in your country? Let’s crowdsource ideas in the comments! Andrew Saputro Bunga Karnisa jeffri ricardo Rocky P. Astri Wahyuni satvinder singh Zarifa Emily Putri Sayyid Al Murtadho Muhammad Fakhri Abdurrohman Brasukra Gumilang Sudjana Latifahaida Latif Natalia Derodofa Lukman Oesman Manuel Geoffrey #Sustainability #CircularEconomy #Recycling #ASEAN

A flame retardant in crisis. The plastic industry on alert. If you are involved in the plastic industry, I am sure you have already discussed this topic into your organizations. Antimony Trioxide is becoming a major pressure point. - Prices have nearly quadrupled in a year. - 75-80% of supply is concentrated in China - Export controls (China posed many restricton and tight procedure for the export), mine shutdowns and geopolitical uncertainty. - Compounding cost and production timelines are getting critical. - Urgent shifts toward substitution (not always available), redesign and recycling. This crisis is pushing us to try answering to some questions like: Are we too dependent on single-source critical raw material? Can we accelerate innovation fast enough? What does a "post-antimony" flame retardant system look like? At the end of the day this is't just about material shortages or price increase , it's more about redefining the landscape of flame retardant plastic industry and analyzing the European industry resilience. How much is your business impacted? how is your business, company adapting? #PlasticsIndustry #FlameRetardants #AntimonyTrioxide #SupplyChainCrisis #MaterialScience #Innovation #Sustainability #CircularEconomy #FireSafety

INDONESIA’S PLASTIC PACKAGING INDUSTRY The escalation of geopolitical tensions in the Middle East has begun to affect the global plastics and packaging supply chain, raising concerns among industry players in Indonesia. Uncertainty surrounding raw material supply and price volatility has become a key issue for packaging manufacturers. Indonesia’s plastic packaging industry still relies heavily on imported raw materials. More than 50% of plastic resins used in packaging applications are sourced from imports, while domestic production capacity can only meet about half of the national demand. The main materials used by the industry, such as Polypropylene (PP) and Polyethylene (PE) are largely supplied from Singapore, Thailand, China, India, South Korea, and several Middle Eastern countries. Recent disruptions have intensified after several petrochemical producers in the Middle East declared force majeure, creating uncertainty in supply availability. Industry estimates suggest that existing inventories may only cover two to three months of production, depending on supply conditions. The situation has also pushed plastic raw material prices up by an estimated 80–100%, potentially reaching 1.5 to 2 times pre-conflict levels. This poses a major challenge, as raw materials account for 50–70% of packaging production costs. To mitigate the impact, packaging manufacturers are strengthening collaboration with Fast Moving Consumer Goods (FMCG) companies to explore alternative materials and packaging solutions. In some cases, polypropylene-based films used in flexible packaging may be substituted with polyester film, while paper-based packaging is also being evaluated as a possible alternative. Despite current challenges, the food and beverage sector remains the largest user of plastic packaging, accounting for approximately 60% of total demand, followed by the personal care and household product sectors. Looking ahead, Indonesia’s packaging industry is expected to maintain positive long-term prospects, supported by the country’s large domestic market and continued growth in consumer demand, despite the short-term pressures currently affecting the sector. Chandra Asri to Declare Force Majeure PT Chandra Asri Pacific Tbk has issued a force majeure notice to its business partners following escalating tensions involving Iran, the United States, and Israel that have disrupted shipping activities through the Strait of Hormuz, a key global corridor for energy and petrochemical trade. The disruption could affect the flow of raw materials across the petrochemical supply chain. The company stated it remains committed to maintaining operational continuity while closely monitoring geopolitical developments. As Indonesia’s largest integrated petrochemical producer, Chandra Asri Pacific Tbk manufactures essential materials including olefins, polyolefins, and styrene monomers used in products such as plastic packaging, pipes, automotive components

Asian producers are meeting Europe, and the result is more complicated than expected. I am Siggi. I know the chemistry in Asia. The pressure on Asian producers is enormous. New capacities are coming online, investments in innovative product segments have been made, some are moving into entirely new industries. The expectation behind all of this is clear: Europe should become part of the growth story. But Europe is not playing along. Not because the products are inferior. Not because the pricing is wrong. But because demand is simply weak, and because European customers do not switch suppliers in times of uncertainty. They stay. With familiar partners, with established relationships, with what has worked before. That is not irrational behavior. Security has a real economic value in European procurement, even if it never appears in any calculation. What emerges is a structural gap. On one side, production capacities looking for buyers. On the other, customers who see no reason to act. In between, frustration grows, on both sides. For the sales teams of Asian producers, this means one thing: Europe is not a volume project. It is a patience and trust project. Those who do not understand that will burn budget and time. For European buyers, it means this: the alternatives are there, qualified and ready. At some point the pressure will be strong enough to overcome the inertia. The window is opening, but both sides need to understand how it actually works. That’s the chemistry. Siggi