Indonesia Secures $1.2 Billion Investment for New Chemical Plant to Boost Exports

Indonesia’s sovereign wealth funds, Danantara Indonesia and the Indonesia Investment Authority (INA), have signed a Memorandum of Understanding (MoU) with petrochemical giant Chandra Asri Pacific to strategically invest in a 15 trillion IDR ($1.2 billion) chlor-alkali and ethylene dichloride (EDC) plant. The project, part of Indonesia’s national strategic plan, aims to strengthen domestic supply chains and reduce reliance on chemical imports.

The plant, to be built by Chandra Asri's subsidiary Chandra Asri Alkali in Cilegon, Banten, will have an annual capacity of 400,000 tons of solid caustic soda and 500,000 tons of EDC, with operations expected to begin in 2027. Phase two of the project will expand capacity and focus on high-value chlorine derivatives to enhance Indonesia’s industrial competitiveness.

In addition to meeting domestic demand, the plant will drive exports, with EDC products projected to generate 500 billion IDR annually in foreign exchange revenue. Caustic soda will also support Indonesia’s growing nickel refining and electric vehicle (EV) battery sectors, positioning the country as a critical player in the global EV supply chain.

The project’s inclusion in Indonesia’s five-year national strategy ensures government backing and prioritization, marking a milestone for industrial transformation and global value chain integration.