Lotte Chemical Titan increased its investment to US$4.3 billion for the construction of the petrochemical factory complex in Indonesia - Photo by Industry Ministry

JAKARTA (TheInsiderStories)Lotte Chemical Titan, a South Korean petrochemical company, increased its investment to US$4.3 billion for the construction of the petrochemical factory complex in Indonesia. With the additional investment, Lotte will increase the production capacity of naphtha crackers to 3.5 million tons a year from the initial plan of 2 million tons a year.

“Lotte is sure to increase its investment so that it will be $4.3 billion. They want to increase investment, even though the factory is currently under construction,” said industry minister Agus Gumiwang Kartasasmita based on his statement received in Jakarta on Wednesday (11/20).

Previously, Lotte Chemical had buried its capital to build a $ 3.5 billion petrochemical factory complex in Cilegon, Banten. If the additional investment is realized, it is projected to be $ 4.3 billion, said Kartasasmita.

The plant, which stands on an area of ​​100 hectares, will process more high value-added naphtha crackers. The raw material can be produced into several derivative products, such as ethylene, propylene, polypropylene, and others. After officially operating, the production from this factory will be used to meet domestic and global demand.

“So, this step is in accordance with the direction of President Joko Widodo to continue to boost investment and downstream industrial sectors. This strategic effort is believed to fundamentally improve the economy, with foreign exchange savings from import substitution, and will also be able to improve the current trade balance because it is export-oriented,” said Kartasasmita.

The ministry noted, from January to August 2019, the export value of the chemical industry and chemical products group had contributed up to $9 billion. Seeing these, the chemical industry is considered to provide a significant contribution to the country’s economy.

The minister emphasized that he was determined to focus on encouraging the growth of the petrochemical industry in Indonesia. This is because the petrochemical industry, which is categorized as the mother sector, produces various commodities that can be utilized as raw materials by other manufacturing sectors.

“Based on its characteristics, the petrochemical industry is a type of manufacturing sector that is capital intensive, technology-intensive and hungrily energy so it needs special attention from the government for sustainable development steps,” he added.

In order to boost the productivity and competitiveness of the petrochemical industry, it is necessary to support energy supply at competitive prices, such as industrial gas, because it is vital as raw material, Kartasasmita said.

“In addition, infrastructure is needed, including transportation networks and ports, the need for mastery of research and use of the latest technology, as well as the availability of competent human resources as stipulated in the implementation strategy of Making Indonesia 4.0,” he adds.

In an effort to supply competent workers, the ministry facilitates the development of the Chemical Industry Polytechnic in Cilegon. PT Lotte Chemical Indonesia absorbs up to 1,500 direct workers and indirect labor reaches 4,000 by 2023.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com