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Kamis, 12 September 2024

Petrochemical Industry Worth IDR 59 Trillion in Cilegon to Begin Commercial Production in March 2025

Cilegon, September 12, 2024 – After being stalled for six years, the IDR 59.37 trillion petrochemical investment project by PT Lotte Chemical Indonesia (PT LCI) is finally set to commence operations. Minister of Investment/Head of the Investment and Downstream Industry Coordination Board (BKPM) Rosan Roeslani visited PT LCI's industrial area to directly inspect the company's readiness to begin commercial production in March 2025, on Wednesday morning (11/09) in Cilegon.

“I highly appreciate PT Lotte Chemical Indonesia and the support from the local government, enabling the petrochemical plant construction to be nearly complete, approximately 98.7%. It is expected to begin production in March next year and start exporting in May,” said Rosan during a press briefing after visiting the production facility, which is built on 110 hectares of land.


PT LCI is one of the investment projects facilitated by the government following the establishment of the Investment Acceleration Task Force by President Joko Widodo through Presidential Decree Number 11 of 2021. After facing various licensing and land overlap challenges, the project successfully resumed construction in April 2022.


The PT LCI project involves the development of petrochemical facilities to produce polypropylene and other downstream products such as butadiene and BTX (benzene, toluene, xylene). These products serve as critical raw materials for various industries, including bottle manufacturing, tires, paints, medical equipment, and insect repellents.


“This industry is vital for downstream development in Indonesia. At the same time, the company employs 14,000 workers, with only 4% being Korean nationals. In terms of employment, technology, industrialization, and exports, this project has a positive impact on Indonesia, especially in the Cilegon area,” Rosan stated.


Rosan also emphasized the government’s super tax deduction policy of up to 200% for companies contributing to vocational education development. This reflects the Indonesian Government's commitment to ensuring that not only companies grow and develop but also the human resources within Indonesia.


At the same event, PT LCI President Director Yim Dong Hee expressed his appreciation for the visit by the Minister of Investment/Head of BKPM to LCI’s production facility. This reflects the government’s attention to every development in LCI’s investment progress.


“We are very grateful for the support provided by the Indonesian government, especially the Ministry of Investment and the local government. Next year, we are ready to start production, and we hope to invite the government here again,” said Yim Dong Hee.


According to data from the Ministry of Investment and Downstream Industry/BKPM, PT Lotte Chemical Indonesia’s investment is recorded as foreign direct investment (FDI) from Malaysia, as the majority shareholder (51%) is Lotte Chemical Titan Holding Bhd, based in Malaysia. Over the past 10 years, Malaysia has ranked fifth as the largest source of FDI in Indonesia, with total investments reaching USD 21.86 billion. South Korea, as the country of origin of the minority shareholder in PT LCI, ranks seventh with total investments of USD 18.20 billion. The involvement of these two countries in this strategic petrochemical project demonstrates foreign investors' confidence in Indonesia's economic growth potential and investment climate.


For further information, please contact:

Ahmad Faisal Suralaga

Head of Communications and Information Services Bureau

Ministry of Investment and Downstream Industry/BKPM

E-mail: humas@bkpm.go.id

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