Government Encourages Strengthening Upstream Industry To Accelerate National Industry Transformation

JAKARTA - Often referred to as industry of industry, the upstream chemical sector is also one of the hearts of modern industrialization and has a multiplier effect to many other economic sectors.

No less than 6,000 types of downstream products from various industrial sectors in Indonesia depend on the supply of basic petrochemical industries such as the automotive, fertilizer, pharmaceutical, electronics, to the textile and synthetic fiber sectors.

In the inauguration ceremony of the integrated petrochemical factory PT Lotte Chemical Indonesia (LCI) in Cilegon City, President Prabowo Subianto expressed his appreciation for the development of this strategic project and encouraged support for investments that could provide mutual benefits.

Our respect is anyone's partner. Moreover, foreign partners come to us, invest their money, which they are looking for for for decades. They trust us. Here they benefit us, we have to secure it," said President Prabowo, in his statement, Friday, November 7th.

The government welcomes the operation of the PT LCI production facility which is also an important milestone in strengthening the independence of the national petrochemical industry as well as clear evidence of global investor confidence in Indonesia's economic prospects.

Coordinating Minister for Economic Affairs Airlangga Hartarto said this emphasized that strengthening the upstream chemical sector is an important part of the Government's efforts to encourage industrial transformation and increase national economic competitiveness.

He added that the investment process for this production facility had started in 2016 and became an important step in accelerating investment realization.

"This is also proof of the success of the Government's support for strategic investment which is expected to be replicated in other projects," he said.

The inaugurated PT LCI production facility is in the production process using raw materials for naphtha and LPG with an annual capacity of 1 million tons of ethylene and 520,000 tons of propylene, which will replace imports of upstream chemicals worth billions of dollars.

In addition to encouraging import substitution, the existence of this industry also opens up new export potential and extends the trend of the national trade balance surplus.

"Strengthening the manufacturing industry is one of the strategies to achieve the 8 percent economic growth target. The existence of a strong upstream industry is expected to further strengthen the growth of the intermediate and downstream industries," he concluded.