Monday, 14 October 2019 | 11:00 WIB

Indonesian Gov‘t Encourages Investments in Petrochemical Industry

Indonesia Minister of Industry Airlangga Hartarto (special)

JAKARTA, NETRALNEWS.COM -- The Indonesia Ministry of Industry continues to encourage increased investment in the petrochemical industry sector. In addition to growing the upstream sector, the aim is also to boost production capacity so that it can meet the needs of the domestic and export markets, as well as import substitutes.

"The petrochemical industry is an upstream sector that plays an important role in supporting production needs in a number of downstream manufacturing. The products produced by the petrochemical industry, among others, are used as raw materials in the plastics, textile, paint, cosmetics and pharmaceutical industries, "said Minister of Industry Airlangga Hartarto in Jakarta.

According to the Minister of Industry, it is determined to further strengthen the mother of industry so that the supply chain and domestic manufacturing structure will be deeper so that it can be competitive in the global arena.

"Sustainability in the development of the petrochemical industry is very important for economic activity or bringing a multiplier effect. Moreover, the chemical industry is included in the pioneer sector in Making Indonesia 4.0, "he said.

Airlangga said that one of the large-scale petrochemical industries is ready to invest in the Java Integrated Industrial and Port Estate (JIIPE) Industrial Zone in Gresik, East Java.

"We received confirmation from several industries, including industrial estates in East Java, there will be large investors in the petrochemical industry sector," he said.

Furthermore, the pterochemical industry is currently in the stage of land acquisition. The plan is to operate in 2022. "If you have land acquisition, that means it's already serious. Usually the construction for construction is a maximum of 2-3 years, "he added.

The Ministry of Industry noted that the petrochemical industry also contributed significantly to the national economy. In 2018, investments in the chemical and pharmaceutical industries reached IDR 39.31 trillion. In addition, the chemical industry and goods from chemicals group carved an export value of US$ 13.93 billion.

The Minister of Industry is optimistic that investment and expansion in the manufacturing industry sector will increasingly stretch after the general election and presidential elections, some time ago. This also proves that the economic, political and security climate in Indonesia is still conducive, which will increase the sense of investor confidence in doing business.

"Manufacturing contribution to GDP is the highest consistent. Then, some industrial sectors, there is a double digit growth and exceed economic growth. We also see that in the future investment will increase, one of the indicators is the purchase of land in industrial estates that continue to rise, "he explained.

In the first quarter of 2019, the manufacturing sector that experienced the highest growth was the textile and apparel industry by 18.98 percent. Followed by the tobacco processing industry which grew to 16.10 percent, then the furniture industry grew 12.89 percent and the chemical, pharmaceutical and traditional medicine industries grew 11.53 percent.

The positive performance was also followed by the paper and paper products industry, printing and reproduction of recording media which experienced 9.22 percent growth, the base metal industry grew 8.59 percent, and the food and beverage industry grew 6.77 percent. These manufacturing sectors that were able to surpass national economic growth in the first quarter of 2019 were 5.07 percent.

"Most of these industries are priority development according to the map of Making Indonesia 4.0. This sector has a large economic impact and the eligibility criteria for implementing industry 4.0, "said Airlangga.