Covid-19 continues to rage around the world, seriously damaging global and regional economic growth. As a result, companies in the plastics industry in Southeast Asia have been forced to cut their capital expenditure in 2020 as a measure to maintain during the crisis.
They have even been forced to rationalize some of their operating expenditure plans, including reducing unnecessary expenditures and delaying some expansion projects to mitigate the impact of covid-19. Global data said the final progress of these projects may depend on demand dynamics and the pace of economic recovery.
Dayan and kharade, oil and gas analyst at global data, commented: “petrochemical operators focus on strategic needs and adjust project schedules accordingly. Companies tend to delay project implementation or financial investment decisions as much as possible. Although necessary, these delays may affect the profitability of enterprises and prolong the time required for enterprises to achieve break even
The increase in polymer capacity is mainly concentrated in Indonesia, mainly in response to growing domestic demand and reducing dependence on imports. Most of the coming capacity in Indonesia, Brunei and Thailand is in the early stages of development and may be delayed in view of the current economic situation. However, projects in the final stages of development are likely to move forward, despite the short-term impact of covid-19.
Kharade concluded: “polymer demand in Southeast Asia is expected to decline in 2020 as demand in construction, automotive and other sectors weakens. However, growing demand in packaging, FMCG and healthcare has helped sustain the growth of the polymer market. With the lifting of the main blockade and the improvement of commercial activity in the region, the demand for polymers is expected to pick up by the end of 2020 and is likely to maintain growth from 2021. “