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Indonesia Towards No. 1 Petrochemical Producer in ASEAN

The chemical industry is one of manufacturing sectors that are getting development priorities in the road map of Making Indonesia 4.0.


The Chemical industry is the top three sectors (Top 3) contributor to the performance of non-oil and gas processing industry sector and spurring the growth of national manufacturing industry. In 2021, the export value of chemicals and goods made from chemicals reached USD 18.86 billion.


The petrochemical industry is a strategic sector at the upstream level which is the basic capital and the main prerequisite for the development of downstream industries such as plastics, fiber, textiles, packaging, electronics, automotive, pharmaceuticals, and other importance industries.


From 2020 to 2030, the government is trying to oversee the construction of a giant chemical industry with a total investment value of USD 31 billion. With fully supported by the government, Indonesia will become the No. 1 petrochemical-producing country in ASEAN with an additional total capacity of 5.7 million tons of Olefins per year and an additional total capacity of Polyolefins of 4.7 million tons per year. The government is also committed to building a globally competitive manufacturing industry by accelerating the implementation of industry 4.0.


According to data from the Association of Indonesian Olefin, Aromatic and Plastic Industries (INAPLAS), imports of petrochemical products are quite high. Upstream petrochemical products such as polypropylene (PP), polyvinyl chloride (PVC), polyethylene (PE), and polystyrene (PS) are almost 6 million tons. Meanwhile, the domestic industry is only able to meet around 30 percent of domestic demand.


Based on data from the Ministry of Industry, Indonesia’s total imports of petrochemical products reach 8.10 million tons per year with a value of US$10.89 billion. In detail, 3.03 million tons of upstream petrochemicals, 0.78 million tons of intermediate petrochemicals, and 4.29 million tons of downstream petrochemicals.