Lotte Chemical said Friday that it has launched operations at its 5.7 trillion won ($3.9 billion) petrochemical plant in Indonesia, aiming to expand its footprint in the nation’s chemical feedstock-dependent market.
The company held a completion ceremony for the Lotte Chemical Indonesia New Ethylene (LINE) project in Cilegon, Banten province, Indonesia, attended by 300 key figures, including Lotte Group Chairman Shin Dong-bin, Lotte Chemical CEO Lee Young-jun and Indonesian President Prabowo Subianto.
Lotte Chemical’s LINE Project — run by its local unit, Lotte Chemical Indonesia, established in 2016 — completed the production line setup in May and began full commercial production in October. The plant is capable of producing 1 million metric tons of ethylene, 520,000 tons of propylene, 350,000 tons of polypropylene, 140,000 tons of butadiene and 400,000 tons of benzene, toluene and xylene. These chemicals are essential raw materials for a wide range of industries such as plastics, synthetic rubber, solvents and polyester fibers.
Once the company starts supplying 1 million tons of ethylene annually, Indonesia’s ethylene self-sufficiency rate is expected to reach 90 percent, up from the current 44 percent.
With the launch of the LINE Project, Lotte Chemical has established a vertically integrated production system in Indonesia, maximizing efficiency across its petrochemical operations. Adjacent to the plant is Lotte Chemical Titan Nusantara, which has an annual polyethylene production capacity of 450,000 tons and had previously depended on imported ethylene as a feedstock. Now, with ethylene supplied directly through pipelines within the complex rather than by sea, the company can significantly reduce transportation costs and streamline production.
Moving forward, the company plans to leverage Indonesia as a strategic base to accelerate its expansion into the fast-growing Southeast Asian market. With its significant domestic demand and proximity to neighboring countries such as Malaysia, Vietnam and Thailand, Indonesia is considered an ideal regional hub for petrochemical supply.
“Marking one of the largest investments made by a Korean company, (Lotte Chemical Indonesia) symbolizes the strong partnership between the two nations and a crucial foundation for enhancing Indonesia’s petrochemical sector and competitiveness,” stated Shin. “(The project) is expected to generate approximately $2 billion in economic value and contribute to Indonesia’s sustainable growth.”
hyejin2@heraldcorp.com
