TEMPO.CO, Jakarta - The Industry Ministry projected investment values for the chemical, pharmaceutical, and textile industries (IKFT) would reach Rp130 trillion in 2019.
The ministry’s chemical, textile and miscellaneous industry (IKTA) director general, Achmad Sigit Dwiwahjono, believed previous capital investments would strengthen the structure of the manufacturing sector in the country as well as substitute imports.
“In this political year, several long-term investors remain. We hope the investments will boost the growth of the national industry,” said Sigit in a written statement on Friday, January 4.
According to Sigit, investments in the chemical industry would gain the highest value as they were capital-intensive and required high-end technology. The chemical industry also plays a strategic role in the upstream sector as it produced raw materials needed by other industries.
“Several investors have shown interest in expansion in the upstream chemical sector, including South Korea, whose discussions are still afoot," said Sigit.
Sigit mentioned PT Lotte Chemical Indonesia invested US$3.5 billion in the construction of petrochemical industry, which was expected to produce 2 million tons of naphtha cracker per year in Cilegon, Banten. In addition, PT Chandra Asri Petrochemical also invested US$5.4 billion.
“We are committed to encouraging the acceleration of the complex petrochemical construction, thus it will support the reduction of petrochemical product imports by a minimum of 50 percent,” Sigit noted.
Sigit hoped the project would utilize more local components and employ local workers. The ministry, he added, planned to build Polytechnic of Petrochemical Industry in Cilegon this year in a bid to meet the demand for operators and other employees in the sector. “The government will also provide tax holiday.”
Sigit was upbeat the pharmaceutical industry growth in Indonesia could reach 7 to 10 percent in 2019. Besides higher investments, the positive performance of the industry could be jacked up by the National Health Assurance (JKN) program. “The program is still a magnet to investors because it raises demands,” he concluded.