The chemical industry is the top three sectors that support the performance of the non-oil and gas processing industry and spur national economic growth. Therefore, the Ministry of Industry (Kemenperin) continues to focus on developing investment in the chemical industry to be able to substitute imports of chemical materials and goods. "In 2021, the export value of chemicals and chemical goods will reach US$ 18.86 billion. In the midst of the pandemic and economic recovery, we continue to strive to improve the trade balance deficit in the chemical industry sector," said Plt. Director General of Chemical, Pharmaceutical and Textile Industries (IKFT) Ignatius Warsito representing the Minister of Industry at the Inauguration of the PVC Factory Expansion (Phase-7) and the Launching of PT Asahimas Chemical's Export in Cilegon, quoted from a press release on the Ministry of Industry website, Saturday (2/4).

Warsito explained that his party is currently compiling a commodity balance as a form of commitment to mapping or providing data and information on the consumption and production situation of certain commodities for industrial needs. It is hoped that this will provide a balance to Indonesia's trade balance.

According to Warsito, the petrochemical industry is a strategic sector at the upstream level which is the basic capital and main prerequisite for the development of downstream industries such as plastics, fiber cloth, textiles, packaging, electronics, automotive, medicine and other important industries. "The success or failure of the government in developing the national industry is wrong"

As a supplier of raw materials for the downstream industry, the petrochemical sector is also expected to have adequate capacity and have good and stable performance at all times. This has spurred the government to continue to strengthen the petrochemical industry through increasing production capacity and completing the industrial tree structure to ensure the fulfillment of industrial raw material needs.

During 2020 to 2030, the government is trying to oversee the construction projects of the giant chemical industry with a total investment value of US$ 31 billion. The investment is intended to strengthen commodities in the upstream chemical sector and be able to substitute petrochemical products that are still imported, such as Ethylene, Propylene, BTX, Butadiene, Polyethylene (PE), and Polypropylene (PP).

"The national industrial capacity for these products currently reaches 7.1 million tons per year," said Warsito.

In order to meet the increasing domestic demand, it is necessary to increase petrochemical production capacity. With a large investment in the petrochemical industry which is currently fully supported by the government, Indonesia will become the number one petrochemical producer in Southeast Asia with an additional total olefin capacity of 5.7 million tons per year and an additional total polyolefin capacity of 4.7 million tons. per year.

The Ministry of Industry appreciates the realization of the PT Asahimas Chemical Phase-7 project investment in Cilegon, because it shows that the potential for the development of the intermediate petrochemical industry is very large.

With the addition of PVC product capacity of 200,000 tons per year. PT Asahimas Chemical contributes to increasing domestic supply in anticipation of increasing domestic PVC demand as well as increasing export market potential.

"Until the 7th expansion, PT Asahimas Indonesia is able to absorb up to 1,250 workers. Therefore, we need to appreciate the PT Asahimas Chemical factory expansion project," added Warsito.

In addition, the increase in PT Asahimas Chemical's production capacity is to provide certainty in the supply of raw materials for other industrial sectors. Thus, industrial users will maintain their productivity and be able to develop their investments.

Warsito added, the chemical industry is characterized by its capital-intensive and very large investment value, specific raw material requirements, high risk on the safety side, and very tight competition from the business side. Thus, the Ministry of Industry understands the importance of the government's role in facilitating a more competitive chemical industry investment climate.

"The government, in this case the Ministry of Industry, has made several strategic efforts, among others by providing natural gas price incentives of US$ 6 per MMBTU by carrying out efforts to control imports and secure the domestic market, optimize the use of the domestic and export markets, the Domestic Production Improvement Program. State (P3DN), as well as providing fiscal incentives such as Tax Allowance, Tax Holiday, Super Deduction Tax for R&D and Vocational Studies, as well as the application of SNI and SKKNI," he said.