Thursday, 7 November 2013


The petro-chemicals industry has been notably growing, the benefit was not only felt in the strengthening of the supply chain from upstream to downstream but also for the growth of national economy, i.e. as forex maker and employment agent. The petrochemicals industry was one of the basic industry being developed over the past 3 years. Beside petro chemicals there were some important basic industries on the priority list of development, i.e. steel industry, metal industry and other upstream industries.

The Minister of Industry MS Hidayat stated on Friday [25/10] stated that the petrochemicals industry was an industry to be prioritized. This industry could suppress import of raw materials so domestic need for raw materials could be fulfilled by Indonesia based companies. He supported the policy of giving incentives like tax allowance which would enhance growth in industry. “This is an important industry so we prioritize the development,” Hidayat said.

Furthermore the Ministry of Industry continued, by next year machineries for textile and manufacturing could be produced in Indonesia, so import would be needed. The Ministry of Industry urged national petro-chemical industry to use domestic resources.

Hidayat felt that the upstream industry must be prioritized because it could minimize import of raw materials. The Government had building basic industry since 3 years ago. He predicted growth of non oil gas industry by end of 2013 would reach 6% - 6.5%; one of the factors which started industry growth was building of factories like cement factories, steel and petrochemicals.

Hidayat appreciated PT Nippon Shukobai Indonesia [NSI] who had increased their investment. Additional investment by PT NSI as producer of petrochemicals amounting to USD 332 would strengthen petrochemicals industry in Indonesia. He stressed that Indonesia’s economic structure would be stronger with investment of that magnitude. Moreover, he said, petrochemicals was one of development. The industrial expansion included acrylic acid factory, with increased capacity of 80,000 tons. So production capacity became 140,000 tons placing it as one of the biggest acrylic acid production centers in Southeast Asia. Minister Hidayat also remarked that this investment signaled bettered investment climate in Indonesia.

Meanwhile Vice Chairman of the Indonesian Olefin Aromatic Plastic Industry Association [Inaplas], Suhat Miyarso in Jakarta [Friday 25/10/2013] disclosed that the national petro-chemical industry was still imbalanced as downstream industry was not balanced by growth of the upstream industry, resulting in uncontrolled import. In 2012 the downstream petrochemical industry grew by 11% while the upstream industry grew by 4%. By end of 2013, the downstream industry was predicted to grow by 4% and the upstream industry would grow by around 4%.

Suhat said that imbalance of growth made the downstream industry like the plastic industry to import their raw materials to keep production rolling. Dependency on import content would swell if the upstream industry did not okay catch up with the downstream industry. Suhat was also aware that expansion in the upstream sector was hard to be exercised due to limited supply of nafta from Indonesian factories. Therefore the plan to build three factories at the capacity of 300,000 barrels per day was most urgent and indispensable.

Business News - October 30, 2013

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