Indonesia chemical sector set for growth

With China becoming Indonesia's reliable source of investment, the country's chemical industry is witnessing a stronger growth path. That was the message conveyed by speakers and participants at a Jakarta forum on Monday.

The Indonesian government is pushing for a better future for investment in the chemicals sector — currently a significant contributor to the country's gross domestic product.

Erlangga Rismantojo, vice-president for strategic development at state-owned fertilizer producer Pupuk Indonesia, told the forum the country needs many local and foreign partners to further develop the chemical industry. "We need people with the technological capability to develop and invest in our chemical industrial sector," he told participants at the one-day Chemical Industry Investment Summit, or ICIIS, 2024, which was attended by representatives from about 600 companies.

Among the Chinese companies taking part were leading players China National Chemical Engineering Sixth Construction and Nanjing Iron & Steel Group. Indonesian firms that were taking part included Pupuk Indonesia and Amer Technology Indonesia.

In the past couple of decades, Indonesia has maintained the chemical industry as a strategic part of its national development, through supportive policies and regulations.

The chemical industry has become a basic asset for the country's businesses to produce food and beverages, cloth fibers, packaging materials, plastic articles, and electronic items.

The chemical industry ranks fifth among sectors with the largest foreign investment. On top, according to the Ministry of Investment, is the basic metal and related equipment sector, followed by transportation, warehousing and telecommunication, the mining sector, and the food industry.

Rismantojo was among the business leaders who spoke at ICIIS 2024, jointly held by PT Shan Hai Map and China Unicom, and which aimed to help Chinese investors gain better knowledge and understanding of business opportunities in Indonesia.

Guo Guanbo, general director of the Indonesia (Malaysia) Office of China National Chemical Engineering Sixth Construction, said at the forum that Indonesia is a good place for Chinese investment, judging from the company's achievements since 2012, the year it first entered the Indonesian market.

He said Indonesia has a huge potential to develop the caustic soda and soda ash industry and will demand plenty of industry salt.

"We are expecting the development of Indonesia's basic chemical industry and to get involved in the EPC (engineering, procurement and construction)," Guo said.

Allan Han, managing director of the China-ASEAN Business Alliance of ASEAN Plus Group, said Chinese companies are eyeing Indonesia, a big market given the size of its population. On the one hand, Indonesia needs businesses from China, while at the same time, Chinese businesses need markets, Han said.

The writer is a freelance journalist for China Daily.