The Indonesian government welcomes the plan of the Siam Cement Group (SCG) to develop a mega petrochemical project with an estimated investment of US$5.5 billion, equals to Rp75 trillion, in Cilegon, Banten province. The development of the petrochemical plant is expected to reduce downstream industry’s dependence on imported petrochemical raw materials.
Industry Minister Airlangga Hartato said the project will become the largest petrochemical project to be built in Indonesia as well as Thailand. He said the President support the company’s plan given that Indonesia’s petrochemical industry at present is still relying on imported raw materials. At present, domestic production of naphtha cracker reached only 900,000 tons, while demand reached 1.6 million tons. Therefore, Indonesia has to import the raw material to cover the gap.
The Thai company is expected to develop the petrochemical plant through or in cooperation with PT Chandra Asri Petrochemical Tbk. At present Siam Cement holds 30% stakes in Chandra Asri. Hartarto noted that the group’s mega petrochemical project could be viable to get tax holiday from the government, which is being finalized by the government.
