Lower thirds:

00:02 Report by / Georg Matthes
00:29 Kenzi Khoman / Plastic factory owner
01:36 Georg Matthes / DW Correspondent
02:12 Hataikan Kamolsirisakul / Head of Strategy, Thai Wah Public Company Limited
02:58 Kenzi Khoman / Plastic factory owner

Script:

Plastic is becoming scarce. Or to be more clear: polyethylene - the key raw material used to make plastic - is in short supply across Southeast Asia. Here in West Jakarta, one of the last batches is being fed to a machine that produces plastic bottles.

Polyethylene is made mostly from crude oil. And as the war in the Gulf has disrupted supplies, prices have been soaring worldwide.

0:26 
+++ SOT Kenzi Khoman, Plastic factory owner +++
“We’re seeing a sharp drop in demand. Orders that used to be around 200,000 to 300,000 pieces are now down by more than 40%, And even when demand is there, we often can’t fulfill it because we simply don’t have the raw materials.”

0:45 
Only three of the factory’s eleven machines are still running. The situation now is worse than what it was during the COVID-19 pandemic. This family-run business has had to cut its workforce by half to just 7 employees since the Iran war started.

And the impact goes far beyond this factory. From rice to cooking oil, almost all food distribution depends on plastic packaging. As costs rise, businesses are passing them on to consumers. But the crisis also comes with an unexpected shift.

In much of Southeast Asia, plastic is often burned or ends up in rivers and the ocean because of poor wast management. Environmental groups have pushed for alternatives for decades. These alternatives are in the limelight.

1:33 
+++ PTC Georg Matthes +++ 
“The pressure on plastic producers is no longer just environmental - it’s economic.
And that’s opening up new opportunities for companies producing biodegradable alternatives like these straws or plastic bags.”

1:46 
This company in Thailand produces a substitute made from tapioca - which is a starch released from the Cassava plant. All these products here are biodegradable. Right now the portion of bio plastic in the world is less than one percent.

For years, the company struggled to compete on price.
Now, the surge in plastic costs is turning things around. 

2:11 
+++ SOT Hataikan Kamolsirisakul, Head of Stategy, Thai Wah Public Company Limited +++
“I think ultimately, whether there's a shock or not, the world still needs to move towards sustainability. Whether it be because of climate change, carbon footprint, the shock in the supply chain, we all need alternatives to what we're using now. Yes, plastic is big. And yes, the price of plastic goes up now, but it will come down. Now whether it comes down to the same level or slightly higher or even lower, no one knows. But ultimately, longer term, the world still needs sustainable packaging material.”

2:38 
Back in Indonesia, the plastic factory owner is also shifting to sustainable policies. He has started recycling defective plastic bottles into granules that can be mixed with polyethylene. The quality may be lower, but it keeps production going and costs down.

2:55 
+++ SOT Kenzi Khoman, Plastic factory owner +++
“Our biggest concern is that customers who have long relied on plastic may start shifting to alternatives, like glass or other materials. That’s a real risk for us.”

3:12 
For Khoman, the Indonesian government's directive to cut import duties on plastic raw materials is welcome. But he says this will only slow the rising prices down. 

Even if the Strait of Hormuz reopens tomorrow, it could take months for supply chains for plastic to recover.

END