Siam Cement plans naphtha cracker plant in RI

Thailand?s Siam Cement Group (SGC) plans to develop a US$600 million naphtha cracker plant in Cilegon, Banten Province, to help meet growing demand in Indonesia and reduce the country?s reliance on import.

This was said by Minister of Industry Airlangga Hartarto in a statement following last week?s meeting with SGC CEO Roongote Rangsiyopash in Bangkok.

Arilangga said that the government will help SGC to be able to quickly realize its naphtha cracker investment plan in Indonesia, suggesting the company to locate the project in an industrial estate to help speed up process.

He also said that the ministry will help SGC in obtaining tax holiday and cheaper gas supply as raw material.

He said that petrochemical industry is a priority of the government of Indonesia as it provides raw materials for various manufacturing industries in the country which still rely on imported raw materials.

According to Fajar Budiyanto, Secretary General of the Indonesia Plastics and Aromatic Olefin Industry Association, about 50 percent of the country?s requirements of petrochemical products are still imported. He cited that of the 1.6 million tons per year demand of polypropylene, only about 700,000 tons can be supplied by domestic producers. Of the total demand of polyethylene of 1.5 million tons per year, domestic producers can only supply 800,000 tons.

The country?s largest petrochemical company PT Chandra Asri Tbk is currently expanding its production capacity to 4 million tons per year, targeted for completion in 2021.

Lotte Chemical and PT Polytama Propindo are also expanding their naphtha cracker plants in Indonesia, Fajar said.

Editing by Reiner Simanjuntak