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ublicly listed petrochemical giant PT Chandra Asri Petrochemical is planning to build a new, multi-billion-dollar ethylene production facility to tap opportunities from a huge supply gap in the country for the material that is key to making plastics.

Indonesia is currently the fourth biggest ethylene producer in Southeast Asia, with 860,000 tons of the chemical produced annually by Chandra Asri, making it the country’s biggest player in the sector.

The new production facility, which will need an investment of US$5 billion, is expected to produce another 1 million tons of the chemical by 2021.

“The new production site will strengthen Indonesia’s position as the fourth biggest ethylene producer in ASEAN and reduce the country’s dependence on imports,” Chandra Asri vice president for corporate relations Suhat Miyarso said during a media briefing on Tuesday.

The new production facility will comprise a naphtha (a derivative of crude oil) cracker to produce ethylene, as well as other machineries to produce polyethylene (PE), polypropylene (PP), butadiene and styrene monomer. All will sit on a 100-hectare plot of land near the firm’s existing production site in Cilegon, Banten.

Ethylene is a basic material for producing other chemicals essential to making plastic, while PE and PP are among the rarest chemicals for plastics in the country.

PE is a mixture used to produce plastics and pipes, while PP is used for automotive plastic components, among other things.

Indonesia still imports 54 percent of 5.2 million tons of chemicals it needs for plastic, according to data from the Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas). Demand in the industry is projected to hit 7 million tons by 2020.

Thailand, the region’s biggest ethylene-producing nation, has a total production output of 5 million tons of ethylene per year, followed by Singapore and Malaysia, with 3.8 million tons and 2 million tons, respectively.

The Industry Ministry previously urged Chandra Asri to bring the construction forward so that the plant can start running by 2021, earlier than the firm’s previous schedule of 2026.

“We’ve talked with them about starting faster and we will provide a tax holiday, as well as safeguards [against imported materials], should they need them,” Industry Minister Airlangga Hartarto said recently.

As the expansion plan would need a huge investment — bigger than the $3.8 billion the firm has invested since its establishment in 1995 — Chandra Asri said it is now in the process of establishing a new subsidiary to control the new plant so that it can apply for the tax holiday from the government.

Previously, publicly listed PT Lotte Chemical Titan (FPNI) and state energy firm Pertamina also announced plans to build naphtha crackers to produce another 2 million tons of ethylene. Pertamina said it is now conducting a feasibility study for a project in Tuban, East Java.

Aside from the megaproject, Chandra Asri director Suryandi said the firm is pursuing some ongoing expansions of existing sites, for which it has allocated $150 million in capital expenditure this year.

The ongoing projects include the expansion of a butadiene production facility that will allow its production capacity to increase by 37 percent to 137,000 tons per year, as well as the construction of a tire factory under PT Synthetic Rubber Indonesia, a joint venture between Chandra Asri’s subsidiary PT Petrokimia Butadiene Indonesia and France-based tiremaker Michelin.

Amid low crude oil prices, the company saw its net profits skyrocket to $300 million in 2016 compared to the $26.3 million they were in 2015.

Chandra Asri imported 100 percent of its naphtha, mostly from the Middle East, since Pertamina does not sell its production to other companies.