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Cilegon's Rp59 trillion petrochemical plant to begin operations in March 2025
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(Courtesy of Ministry of Investment/BKPM)
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fter six years of delays, PT Lotte Chemical Indonesia’s (LCI) massive Rp 59.37 trillion (US$3.84 million) petrochemical investment project is finally nearing operation. On Wednesday morning in Cilegon, Banten, Investment Minister and Chairman of the Investment Coordinating Board (BKPM), Rosan Roeslani, visited the LCI industrial area to directly assess the company’s readiness to commence commercial production in March 2025.
“I highly appreciate PT Lotte Chemical Indonesia’s efforts and the support from the local government, which have brought the petrochemical plant’s construction to near completion, approximately 98.7 percent. We expect production to start in March and exports to begin by May,” Rosan said in a press statement following the facility tour, which is being built on a 110-hectare site.
LCI is one of the investment projects facilitated by the government following the establishment of the Investment Acceleration Task Force by President Joko “Jokowi” Widodo through Presidential Decree No. 11/2021. After encountering various licensing issues and land overlap problems, the project resumed construction in April 2022.
PT LCI project involves the development of a petrochemical facility for producing polypropylene and other downstream products such as butadiene and benzene, toluene, xylene (BTX). These products will be crucial raw materials for various industries including bottle manufacturing, tires, paints, medical equipment and insect repellents.
“This industry is vital for downstream processing in Indonesia. At the same time, the company will employ 14,000 workers, with only 4 percent from Korea. This project positively impacts Indonesia in terms of job creation, technology, industrialization and exports, particularly in the Cilegon area,” Rosan said.
Rosan also emphasized that the government offers a super tax deduction incentive of up to 200 percent for companies contributing to vocational education development. This reflects the government’s commitment to ensuring not only company growth, but also the development of human resources in Indonesia.
During the same event, LCI president director Yim Dong Hee expressed appreciation for the investment minister’s visit to the LCI production facility. This visit underscores the government's attention to investment developments at LCI.
“We are very grateful for the support provided by the Indonesian government, particularly the Ministry of Investment and local authorities. Next year, we are prepared to begin production and hope to invite the government back for another visit,” Yim said.
According to the Investment Ministry and BKPM data, LCI is listed as a Malaysian foreign investment (PMA) because the majority of its shareholders, 51 percent, are from Lotte Chemical Titan Holding Bhd, based in Malaysia. Over the past decade, Malaysia has been the fifth-largest source of foreign direct investment in Indonesia, with total investments amounting to $21.86 billion. South Korea, as a minority shareholder in LCI, ranks seventh with a total investment of $18.2 billion. The involvement of these two countries in the strategic petrochemical project underscores foreign investors' confidence in Indonesia's economic growth and investment climate.
