Chemical Indonesia

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Indonesia targets to become the largest petrochemical producer in Asia

The Chemical industry is the top three sectors (Top 3) contributor to the performance of non-oil and gas processing industry sector in 2022. The chemical industry sector is expected to have adequate capacity and have a good and stable performance at all times as a supplier of raw materials for downstream industries.

The government continues to encourage downstream in the petrochemical industry. The reason is that it can produce primary raw materials to support many important downstream manufacturing industries such as food and beverages, textiles, packaging, plastic goods, electronics, automotive, and medicine. Until October 2022, the export performance of the chemical industry achieved US$18.5 billion, an increase of 20% compared to the same period in the previous year, while in 2023 the target is US$25 billion. 

The national petrochemical production capacity in 2022 is around 7.1 million tonnes per year, and imports of chemical products reaching 4.6 million tonnes in 2020. It needs to increase production capacity for domestic needs. In Presidential Regulation 74/2022, the government is targeting the increase in the utilization, supply, and distribution of oil and gas and coal-based chemicals.

Up to 2030, there are 20 projects with an estimated value of $50 billion in the petrochemical sub-sector are under development. This positive effect is further demonstrated by the most recent Purchasing Manager’s Index from S&P Global, which shows that Indonesia’s manufacturing sector – including the chemical industry – is on an expansionary path, reaching an 8-month high of 53.7 in September 2022. 


Within the masterplan of the new capital city project of the Indonesian government – slated to begin construction in mid-2024 – is a chemical industry complex that has been touted as the world’s largest. The chemical industrial complex is expected to contribute up to US$6.5 billion to the national GDP.


The project above is just one example of how Indonesia is serious about becoming a global player in the chemical material supply chain.