[JAKARTA] Indonesia’s sovereign wealth funds, Danantara and the Indonesia Investment Authority (INA), are exploring a strategic investment in the planned 15 trillion rupiah (S$1.2 billion) chlor-alkali and ethylene dichloride facility by the country’s giant petrochemical producer Chandra Asri Pacific.
The two sovereign wealth funds have signed a memorandum of understanding with Chandra Asri to explore the possibility of participating in the project as strategic investors.
Erwin Ciputra, president director of Chandra Asri Group, stated that the potential partnership aims to boost the domestic production of caustic soda, a major product of the chlor-alkali process, and ethylene dichloride.
“This collaboration supports our efforts to reduce reliance on imports and build a stronger domestic industrial supply chain,” said Ciputra in a statement on Tuesday (Jun 17).
Caustic soda plays a crucial role in the refining of nickel, a crucial component in electric vehicle (EV) batteries. The plant will thus support Indonesia’s strategy to solidify its position in the global EV supply chain.
The project will be executed through Chandra Asri’s subsidiary, Chandra Asri Alkali (CAA). It will involve the construction of a facility designed to produce approximately 400,000 tonnes of solid caustic soda annually (equivalent to around 827,000 tonnes in liquid form), alongside 500,000 tonnes of ethylene dichloride.
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A potential second phase, currently under feasibility assessment, seeks to increase chlor-alkali production capacity and introduce additional chlorine derivatives, with the goal of optimising operational efficiency and generating a broader range of value-added products.
The plant, which is located in Cilegon, Banten, is expected to be completed and start commercial operations in 2027.
The project is part of Indonesia’s national strategic road map for the next five years, granting it government-backed legal support and priority status.
The Indonesian government is working to reduce its reliance on caustic soda imports, which currently amount to nearly five trillion rupiah annually.
Pandu Sjahrir, chief investment officer at Danantara, called the project a key part of Indonesia’s industrial transformation strategy. The initiative, he said, aligns with the country’s broader agenda to strengthen industrial downstreaming and enhance domestic manufacturing capabilities.
“The chemical sector underpins many strategic value chains, from manufacturing to energy transition. This collaboration will foster scalable industrial growth and reduce import dependency, while offering long-term economic benefits,” he added.
In addition to helping replace imports, the plant is expected to contribute significantly to exports. Ethylene dichloride output will be targeted for export markets, potentially generating up to five trillion rupiah in annual foreign exchange revenue.
