Indonesia’s petrochemical sector is entering a new era of industrial self-reliance with the launch of PT Lotte Chemical Indonesia’s mega plant in Cilegon, Banten. With an annual production value of US$2 billion, the facility is expected to substitute 70% of previously imported petrochemical products. This strategic shift not only strengthens domestic manufacturing but also enhances Indonesia’s trade balance and industrial competitiveness.
Key Facts & Background
- PT Lotte Chemical Indonesia’s new petrochemical plant is located in Cilegon, Banten, and was inaugurated on 6 November 2025.
- The plant is designed to substitute 70% of Indonesia’s petrochemical imports, with the remaining 30% allocated for export markets.
- Estimated annual revenue: US$2 billion, with US$1.4–1.5 billion circulating domestically.
- Primary products include:
- Ethylene: 1 million tons/year
- Propylene: 520,000 tons/year
- Mixed C4: 320,000 tons/year
- Pyrolysis gasoline: 675 tons/year
- Pyrolysis fuel oil: 26,000 tons/year
- Hydrogen: 45,000 tons/year
- High-density polyethylene (HDPE): 250,000 tons/year
- Low-density polyethylene (LDPE): 200,000 tons/year
- Polypropylene: 350,000 tons/year
- Butadiene: 140,000 tons/year
- BTX (benzene, toluene, xylene): 400,000 tons/year
- Raw material requirements:
- Nafta: 3.2 million tons/year
- LPG blend: up to 50%
- End-use industries:
- Plastics manufacturing
- Automotive components (e.g., bumpers)
- Medical equipment
- Synthetic rubber and tires
- Paints and coatings
- Household goods
Strategic Insights
The commissioning of PT Lotte Chemical Indonesia’s facility in Cilegon marks a pivotal moment in Indonesia’s industrial policy—one that prioritizes import substitution, value-added production, and downstream integration. By replacing 70% of imported petrochemical inputs, the plant directly contributes to trade deficit reduction, foreign exchange savings, and supply chain resilience.
Petrochemicals are foundational to a wide range of industries, from automotive and electronics to healthcare and consumer goods. Indonesia’s historical reliance on imports for these materials has exposed manufacturers to price volatility, currency risk, and logistical disruptions. The Lotte plant mitigates these vulnerabilities by localizing production, thereby enhancing industrial sovereignty.
The facility’s scale—US$2 billion in annual output—positions it as a regional petrochemical hub, capable of serving both domestic and export markets. Its integration with global supply chains, especially through the export of 30% of its output, reinforces Indonesia’s role in Asia’s manufacturing ecosystem. Moreover, the plant’s product diversity—from ethylene and propylene to BTX and hydrogen—supports cross-sectoral innovation, including green chemistry and advanced materials.
From a macroeconomic perspective, the domestic circulation of US$1.4–1.5 billion annually will stimulate local employment, infrastructure development, and SME participation in downstream industries. This multiplier effect aligns with national goals for inclusive industrialization and regional economic upliftment.