Petrochemical sector in Indonesia likely to see investment outlay of US$7 bln in three years

13-Mar-14

Indonesia is set to see a likely influx of at least US$7 billion in new investment in the petrochemical sector in the next three years as the domestic industry tries to keep pace with rising demand, according to an industry association, as reported by JakartaGlobe. The director for Indonesian Olefin, Aromatic and Plastic Industry Association, said the investment will be made to expand domestic production capacity, which in turn could curb imports that rose to around US$8 bln last year. This investment would translate to 30-50% growth in the industry. By 2020, Indonesia is expected to reduce petrochemical imports to zero. Indonesia produced 1.75 million tons of petrochemical products last year, while consumption was 3.5 million tons, with the difference filled by exports, according to data from the association. Among the major expansion plans are Chandra Asri, which has earmarked US$965 mln to invest by 2015, and state-owned energy company, Pertamina, which has a joint venture agreement with Thailand’s PTT Global Chemical to build a US$5 bln petrochemical facility in Indonesia.