Petrochemical is very important part of the chemical industry and is playing a vital role in improving the economy and society. Today, petrochemical are used in our daily life product such as medicine, furniture, electronic, cosmetic and other. They are usually derived from the components which are extracted from the natural gas liquid and crude oil. Due to their vast use, there is increase in the number of petrochemical plants and worldwide. Petrochemical plants are used to convert these natural resources into products so they can be used in different applications. Ethylene, butadiene, aromatics, propylene and others are some of the common important building blocks which are produced in the industry.
Recently, Lotte announced that they are going to invest around USD 3.5 billion so that they can create Indonesia’s largest petrochemical plant. This investment will help the country to increase their import and help them to reduce their account deficiency.
Lotte chemical Indonesia also held a ceremony in Cilegon, Banten Province for their new ethylene cracker and petrochemical complex. This cracker has the ability to production capability of 1 million ton per year and after Chandra Asri Petrochemical, is the second ethylene cracker.
The existing plant of the company produces polyethylene but only imports required ethylene. The new complex will be producing all the ethylene that is required in the country and is expected to be completed by 2023. The company is not planning to export ethylene but will be using it for their own purposes or will be selling it domestically. Lotte is also planning to start the production of petrochemical so that they can be used in different industries such as textile, automotive and others.
According to the Chairman Shin Dong- bin, Economy of the country is growing constantly and there is increase in the demand for the ethylene. He also added that the high cost of the ethylene is the factor which is reducing the production capacity of the plants. This is the main reasons; the company decided that they should start the production of the ethylene themselves.
The company also decided to invest around USD 44.63 billion in five years to 2023 out which 20 trillion will be used for the chemical and construction. Due to problem they suffered in China, the company is planning to do maximum investment in Southeast Asia.
This new investment is very beneficial for the country as country’s requirement for the imported products is somewhere improving the Indonesia’s present account shortage. The gross domestic product has reached to 2.9%, which is nearer to 3% which is consider as safe limit by central bank.
President Joko Widodo, also told company’s CEOs and real sector to start focusing more industrialization and go downstream and they should stop the export of raw material. Rather than going downstream, there was no other way to solve this situation.
According to the Lotte Shin, This project will help the country to change their export amount to USD 400 million and import to USD 2.1 million. Indonesia already imports around 50% of their petrochemical products.
According to Jakarta industry upgrade program Indonesia 4.0, chemical is one of the 10 manufacturing sectors. The government has launched this program is to increase the adoption of internet of technologies, artificial intelligence and other technologies so that they develop and advance and can transform them as one of the world’s largest economy by 2030.