JAKARTA (TheInsiderStories) – South Korean chemical company Lotte Chemical Titan, is set to realize its US$4 billion investment plan in Indonesia, to producing naphtha cracker with capacity of 2 million tons per year. Naphtha cracker is raw material for producing ethylene, propylene and its derivative products.
During his visit to South Korea, Minister for Industry Airlangga Hartato said, Indonesia now focusing on developing the petrochemical industry as one priority of the country’s development program as this sector has important role in supplying raw materials for many manufacturing business in the downstream segment such as plastic, textile, paint, cosmetics, and pharmacy industry.
The Industry Ministry has also proposed to get a cut in gas prices for the petrochemical industry as this sector consumes the largest portion of gas on the production activity.
Indonesia Government wants to boost the economic cooperation with South Korea, the 3rd largest country investing in the manufacture industrial sector in Indonesia. South Korea’s firms have invested $7.5 billion in Indonesia for past five years, contributing up to 71 percent of total investment in said period. They absorb around 900,000 Indonesian workers.
Other sector, also seen as strategic to be developed, is steel industry, Airlangga said. The Government wants to boost the development of steel industrial cluster in Cilegon, Banten province. This cluster is aimed to produce 10 million tons of steel by 2025.
“This sector is called as mother of industry as its products become main raw materials for other industry’s activities,” he said in written statement.
State steel producer PT Krakatau Steel Tbk (IDX: KRAS) and Posco, a multinational steel-making company, have committed to support the development of 10 million tons steel cluster in Cilegon. Now, KRAS and Posco produce combined 4.5 million tons of steel in Cilegon.
The operation of HSM#2 plant by end 2019 would add 1.5 million tons capacity, making a total 6 million tons capacity. Cilegon steel cluster will produce steel rolls for construction, steel sheet for household equipment, ship, car, and high-quality steel sheet products.