Indonesian Industry Minister Agus Gumiwang Kartasasmita together with his staff held a meeting with Japanese industry players in Tokyo on Monday (11/18) - Photo by Industry Ministry.

JAKARTA (TheInsiderStories) – Indonesia is eyeing investment in the manufacturing industry sector of US$5 billion, industry ministry announced on Monday (11/18). It comes from South Korean Lotte Chemical Titan Holding‘s investment plan of ​​$3.5 billion to build a new petrochemical plant in Banten and $200 million of Japan’s Nippon Shokubai for its expansion of the acrylic acid plant.

“For this investment plan, there are many issues that need to be resolved. But we are optimistic that with this visit, it can be resolved,” said industry minister Agus Gumiwang Kartasasmita during a working visit in Tokyo, Japan, saying that his office continues to encourage increased investment in the manufacturing sector in Making Indonesia 4.0.

Kartasasmita explained that Nippon Shokubai had invested in the country in August 1996, via his unit PT Nippon Shokubai Indonesia, with capital disbursement of up to $120 million. The company plans to expand its factory capacity to 240 thousand metric tons per year from now 140 thousand metric tons per year.

“We hope that Nippon Shokubai can develop acrylic acid derivative products. After 2021, when they are commercial operations, their capacity will certainly increase,” the minister said.

Kartasasmita added, the government is not only pushing to produce upstream chemical products, but also these investments can create downstream chemical products. They almost produce 10 percent of the total needs of acrylic acid products in the world, so what we want to encourage is also its downstream products, he said.

For the steel industry, his office will meet with Nippon Steel Corporation. It aims to find solutions to improve the competitiveness of the country’s steel industry to quells Indonesia’s trade balance deficit.

“We must look for efforts to control the deficit. In Indonesia, Nippon Steel has a partnership with state-run steel maker PT Krakatau Steel Tbk (IDX: KRAS), an investment project worth $142 million,” he explained.

Meanwhile, chemical manufacturer PT Lotte Chemical Indonesia, a subsidiary of Lotte Chemical Titan Holding, has held a ground-breaking ceremony for the Lotte chemical Indonesia new ethylene (LINE) project in Cilegon, Banten, on December 2018.

The LINE project, which includes a naphtha cracker and large-scale petrochemical complex that produces downstream products is expected to commence in 2020 and to be completed in 2023. Lotte Chemical Corporation, Lotte Chemical Titan Holding parent company and which owns 76 percent of the company, is a pioneer in the petrochemical industry and a leader in the development of Korea’s petrochemical industry.

“Indonesia imports more than 50 percent of its petrochemical products and hence the additional domestic production from LINE will improve Indonesia’s trade balance significantly,” said the Lotte Group chairman Shin Dong Bin in a statement, adding that the LINE project will lead to the creation of jobs and significantly expand the plastic fabrication industry.

The huge investment potential of both companies must be guarded, so they are comfortable and this must be done quickly as desired by President Joko Widodo, Kartasasmita said.

The minister revealed investment opportunities that were targeted in his working visit to Japan and South Korea were the automotive, steel and chemical industries. Therefore, he scheduled to conduct one on one meetings with a number of directors from well-known companies of the two countries.

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