Coordinating Minister Airlangga Reveals Lotte Chemical Investment Strengthening Petrokimia Hilir RI

JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto said that Lotte Chemical investment in Indonesia can strengthen the local downstream petrochemical industry.

The realization of investment from the South Korean company is in the form of the construction of a petrochemical factory.

"The construction of a downstream petrochemical factory by PT Lotte Chemical is a form of investment that has been realized in real terms, of course I would like to say that I really appreciate this investment," said Airlangga, quoted from ANTARA, Monday, May 20.

Airlangga explained that the realization of PT Lotte Chemical Indonesia's investment was in the construction of a downstream petrochemical complex or Lotte Chemical Indonesia New Ethylene Project (LINE Project), in the form of a naphtha cracker worth tens of trillions of rupiah located in Cilegon City, Banten.

The South Korean company founded in 1976 has grown to the 7 largest in the world.

Through this opportunity, Airlangga appreciated the realization of investment and the construction of the downstream petrochemical factory complex carried out by Lotte Chemical.

The investment will absorb up to 15,000 workers during the construction period and 1,300 people during commercial operations.

During the visit of the President of the Republic of Indonesia Joko Widodo to the factory area in September 2023, the progress of development has reached 73 percent.

The development project is targeted to be completed and can start operating by 2025. The factory will have a total production capacity of 3.1 million tons per year, where the 2025 production target will produce 1 million tonnes of ethylene, 520,000 tonnes of propylene, and 250,000 tonnes of polypropylene per year.

Currently, Indonesia is still importing significant ethylene, propylene, and polypropylene chemicals. The capacity of the domestic industry for these products currently only reaches 7.1 million tons per year, so efforts are still needed to increase production capacity to meet domestic needs.

Therefore, Airlangga hopes that the PT Lotte Chemical Indonesia factory construction project can subtitute imports so that they can become a stimulus for the local downstream petrochemical industry and support the creation of new jobs.

"With the investment in the construction of the PT Lotte Chemical factory, we hope to be a stimulus for the domestic petrochemical industry, besides that, it is also hoped that it can encourage new jobs for the community," he said.

The economic cooperation between Indonesia and South Korea has strengthened again after the pandemic with a total value of bilateral trade reaching 20.8 billion US dollars in 2023.

As the 7th largest investor in Indonesia in 2023, South Korea's total investment realization into Indonesia is worth around 2.5 billion US dollars, an increase of more than 200 million US dollars from the previous year.