Indonesia's Minister of Trade, Agus Gumiwang Kartasasmita, landed an investment deal with Asahi Chemical from Japan and Lotte Chemical from South Korea. (Image via Kompas.com)
Japanese, S. Korea chemical companies to invest Rp61.8 T in IndonesiaOn Tuesday, Indonesia’s Minister of Industry, Agus Gumiwang Kartasasmita, revealed that two chemical companies from Japan and South Korea (S. Korea) are going to invest in Indonesia with the total amount of Rp61.8 trillion. These two chemical giants are Asahi Chemical (Japan) and Lotte Chemical (S. Korea).
The investment deal was made when Agus was visiting both countries. Asahi Chemical is investing Rp1.3 trillion by expanding its factory to Cilegon, Banten, for its seventh expansion phase.
By expanding its factory to Cilegon, the Trade Minister estimated that Asahi Chemical is going to produce 200,000 metric tons of polyvinyl chloride (PVS) products annually. With salt as one of its raw materials, Asahi once delivered the concern to the Minister. Fortunately, Agus asserted the availability of salt.
Meanwhile, Lotte Chemical is investing Rp60.5 trillion by building factories to hoist productivity. Also in Cilegon, Lotte plans to allocate Rp49 trillion.
The rest of the investment will be used to increase the production of naphtha crackers from initially two million tons to three-and-a-half tons annually. These naphtha crackers will be the raw ingredients for ethylene, propylene, polypropylene and other underlying products.
Lotte’s head of the business unit, Kim Kyo Hyun, said that the investment is done because Indonesia still relies on petrochemical import.
The Trade Minister keeps on encouraging investment in the manufacturing sector that will bring double effects to the national economy such as the increase of the added value of domestic raw materials, local workforce, and foreign exchange earnings from exports.
Agus stated that he will concentrate to simplify the regulations to attract foreign investors on a global scale, in line with the vision of the President of Indonesia, Joko Widodo, generally known as Jokowi, in the implementation of “Making Indonesia 4.0”.
Foreign investment is needed to lead Indonesia to be a developed country with the average economic growth passing six percent by 2024. For that goal, Indonesia requires Rp35,000 trillion foreign investments. But, not only limited to big companies, but Agus aimed the foreign investment to also reach small and medium industries (IKM).