The Indonesian Ministry of Industry (Kemenperin) is developing a monitoring strategy for the petrochemical sector by refining the commodity balance system to track supply and demand more accurately. According to Wiwik Pudjiastuti, Director of Upstream Chemical Industry at Kemenperin, the system will provide data-driven insights into supply and demand dynamics, identifying gaps for potential imports. Currently, the petrochemical industry heavily relies on imported products, while domestic production faces challenges in strengthening its supply chain. National production capacities include 9.72 million tons of olefins, 4.61 million tons of aromatics, and 980,000 tons of methanol and its derivatives. To fortify the sector’s structure, integration between upstream and downstream industries is essential, Pudjiastuti emphasized.
Meanwhile, Hari Supriyadi, Chair of the Chemical, Pharmaceutical, and Textile Industry Committee at the Indonesian Chamber of Commerce (Kadin), highlighted the intense competition local industries face due to cheaper imports. For instance, a Thai petrochemical plant recently shut down due to competition from Chinese imports. The Indonesian Olefin, Aromatic, and Plastic Industry Association (Inaplas) predicts plant utilization rates could drop by 50%, jeopardizing potential investments valued at IDR 437 trillion. Despite these challenges, policies such as specific natural gas price incentives (HGBT) and fiscal incentives are expected to help sustain the industry’s performance.
