Lotte Chemical to develop USD3-4 billion worth of petrochemical plant in Banten

JAKARTA (RambuEnergy.com) – Lotte Chemical of South Korea is expected to realize its plan to develop a naptha cracker plant with estimated investment of USD3 to USD4 billion, Indonesia’s Industry Minister Airlangga Hartarto said Friday.

The naphtha cracker plant is projected to have capacity of 2 million tons per annum. The raw materials will be used to produce ethylene, propylene and other derivative products, the minister said after receiving a courtesy call from President and CEO of Lotte Chemical Titan Holding Sdn Bhd Kim Gyo Hyun at his office Friday (Feb. 17).

“They (Lotte Chemcial) plans to invest in Cilegon, Banten. We have asked them to soon realize their plan in order to meet increasing demand for the products from domestic market, so that Indonesia will no longer need to import,” said Minister Airlangga. The Lotte Chemical CEO was accompanied by the head of National Investment Coordinating Board (BKPM) Thomas Lembong.

Airlangga said the project construction is expected to last about 4-5 years and would employ 9,000 people. As many as 6,000 people will be deployed to work during construction and 3,000 during operation period.

The presence of Lotte Chemical is much needed as Indonesia currently relies on Chandra Asri Petrochemical to produce naptha cracker. Once Lotte’s plant comes into operation, the volume of naptha cracker that can be supplied to domestic market would rise to 3 million tons per annum.

“Lotte Chemcial plans to produce 1 million tons per annum of ethylene, 600 million tons of propylene as well other derivative products such as olefin and aeromatic,” said Director for Upstream chemical industry at the Industry Ministry Muhammd Khayam.

The output of the plant will be used by plastic, textile, paint and pharmaceutical industries.

Airlangga said currently Indonesia imported chemical and petrochemical products worth USD5 billion per annum. The additional supply from Lotte Chemical will reduce imported raw petrochemical products.

The industry ministry has said that it would consider granting incentives to the investor (Lotte) in order to accelerate the development of petrochemical plants. (*)

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