Indonesia is accelerating its downstream industrial strategy through large-scale project development. A new batch of projects signals continued focus on value-added processing across key commodities. The initiative spans energy, minerals, and agriculture sectors. It reflects a policy shift toward reducing reliance on raw exports. The move highlights both industrial ambition and execution complexity.
Key Facts & Background
- President Prabowo Subianto inaugurated 13 downstream (hilirisasi) projects in Phase II with a total investment of Rp116 trillion.
- The projects are distributed across three major sectors:
- 5 projects in energy
- 5 projects in minerals and mining
- 3 projects in agriculture
- Key energy projects include gasoline refineries in Cilacap and Dumai and multiple fuel storage facilities, aimed at improving energy security.
- Mineral-based projects include nickel stainless steel manufacturing, carbon steel slab production, and copper–gold processing, reinforcing resource downstreaming.
- Agricultural downstreaming covers palm oil into biodiesel and oleofood, nutmeg processing, and integrated coconut products, expanding value-added agribusiness.
- One coal-to-DME project is expected to reduce dependence on imported LPG, while refinery projects could cut fuel imports by around USD 1.25 billion annually.
- The 13 projects form part of a broader pipeline, following 11 projects in Phase I, with a target of 30–40 downstream projects initiated in 2026.
- The initiative is coordinated through BPI Danantara, emphasizing integrated national investment planning and execution.
The 13 downstream projects in Phase II consist of various developments in the processing and refining sectors, covering refinery capacity expansion, development of value-added derivative products, and construction of supporting facilities to strengthen the national industrial supply chain, as follows:
- Projects 1 and 2: Construction of gasoline refinery facilities in Dumai (Riau) and Cilacap (Central Java);
- Projects 3, 4, 5: Construction of fuel operational tanks in Palaran (East Kalimantan), Biak (Papua), and Maumere (East Nusa Tenggara);
- Project 6: Development of a DME production facility with a capacity of 1.4 million tons per year in Tanjung Enim (South Sumatra);
- Project 7: Development of a stainless-steel manufacturing facility from nickel at Indonesia Morowali Industrial Park (Central Sulawesi);
- Project 8: Development of a carbon steel slab production facility from local iron ore in Cilegon (Banten);
- Project 9: Establishment of an asphalt ecosystem and production facility in Karawang (West Java);
- Project 10: Downstream copper and gold processing in Gresik (East Java);
- Project 11: Palm oil processing into oleofood and biodiesel in Sei Mangkei (North Sumatra);
- Project 12: Nutmeg processing facility into oleoresin in Central Maluku (Maluku);
- Project 13: Integrated coconut facility producing MCT, coconut flour, and activated carbon in Central Maluku (Maluku).
Source: State Secretary