JAKARTA (TheInsiderStories) - The industry ministry is striving to accelerate the development of petrochemical industry beginning from this year, by encouraging two major petrochemical companies, namely PT Chandra Asri Petrochemical Tbk (IDX:TPIA) and Lotte Chemical of South Korea to begin their major expansion from this year.
“The industry ministry is prioritizing the acceleration of the development of domestic petrochemical industry in 2017 as this strategic sector plays important role in supplying raw materials for downstream industry such as plastic, textile, paint cosmetics and pharmaceutical,” Industry Minister Airlangga Hartarto said.
“Therefore, we encourage petrochemical industry players to realize their investment plan this year. Note that the last major petrochemical industry plant was developed in 1998,” he said Sunday (Feb 19).
Airlangga said Chandra Asri has planned to invest up to US$6 billion to build new naphtha cracker plant by 2021. This year, it spend US$150 million to add the capacity of its butadiene product by 50,000 tons and polyethylene to 400,000 tons per annum.
Chandra Asri aims to double the capacity of its naphtha cracker plant to 1.8 million tons per annum from 900,000 tons per annum at present. While Indonesia’s demand reaches 1.6 million tons per annum.
The second company that has expressed its plan to invest US$3-4 billion or around Rp52-53 trillion to develop naphtha cracker with target capacity of 2 million tons per annum. The product is used as raw materials to produce ethylene, propylene and other derivative products.
Both plants will be developed in Cilegon, Banten, in the western tip of Java Island and are expected to create thousands of new jobs. The new naptha cracker plants are expected to reduce Indonesia’s dependence on imported raw materials, allowing the country to save around US$1.5 billion.(*)