Lotte Chemical Completes Petrochemical Complex in Indonesia: "Targeting the Southeast Asian Market"

Improving Self-Sufficiency in Indonesia's Petrochemical Industry
Achieving Cost Reduction and Operational Efficiency Simultaneously

Lotte Chemical has completed a large-scale petrochemical complex in Indonesia, marking the company's full-fledged entry into the Southeast Asian market.

On the 6th, the completion ceremony of Lotte Chemical Indonesia (LCI) was held in Cilegon City, Banten Province, Indonesia. (Second from the left) Shin Dongbin, Chairman of Lotte Group, (center) Prabowo Subianto, President of Indonesia. Lotte Chemical

On November 7, Lotte Chemical announced that it held the inauguration ceremony for Lotte Chemical Indonesia (LCI) in Cilegon City, Banten Province, Indonesia. The ceremony was attended by approximately 300 distinguished guests from both countries, including Shin Dongbin, Chairman of Lotte Group; Lee Youngjun, CEO of Lotte Chemical; Prabowo Subianto, President of Indonesia; and Park Sudeok, Acting Ambassador of Korea to Indonesia.

In his congratulatory remarks, Chairman Shin stated, "This project is one of the largest investments by a Korean company in Indonesia, symbolizing the strong partnership between the two countries. It will also serve as a crucial foundation for strengthening Indonesia's petrochemical industry and national competitiveness. By producing key petrochemical products such as ethylene and propylene, we expect to create approximately 2 billion dollars (about 2.898 trillion won) in economic added value and contribute to Indonesia’s sustainable economic growth."

President Subianto said, "I extend my respect and gratitude to all those from Lotte Group and the Indonesian government who successfully promoted the LCI project. I hope this inauguration ceremony sets a positive precedent so that other foreign companies investing in Indonesia, like Lotte Group, can operate safely and reliably."

Aerial view of Lotte Chemical Indonesia (LCI) petrochemical complex. Lotte Chemical

Lotte Chemical planned the construction of a large-scale petrochemical complex in Indonesia to strengthen its market dominance in Southeast Asia, an emerging market in the petrochemical industry. The project was named 'LINE,' an acronym for LOTTE CHEMICAL INDONESIA New Ethylene Complex. The LINE project began construction in 2022 on a 110-hectare (approximately 330,000 pyeong) site with a total investment of 3.95 billion dollars and was completed in May of this year. It is set to begin commercial production in 2025 as originally planned, further building trust with the Indonesian government. The complex will produce a variety of petrochemical products annually: 1 million tons of ethylene, 520,000 tons of propylene, 350,000 tons of polypropylene, 140,000 tons of butadiene, and 400,000 tons of BTX (benzene, toluene, xylene).

In Indonesia's "Making Indonesia 4.0" roadmap, the petrochemical industry has been selected as one of the five key priority sectors and is rapidly developing with an average annual growth rate of over 5%. However, the domestic market in Indonesia remains highly dependent on imports, with the local self-sufficiency rate for ethylene at only 44% last year.

With LCI having started commercial production last month, most of its output will be supplied to the Indonesian domestic market. This is expected to gradually reduce the import dependency of local petrochemical companies and raise the ethylene self-sufficiency rate to as high as 90%. As a result, improvements in Indonesia’s trade balance and job creation are also anticipated. The Indonesian government has actively supported LCI’s competitiveness through various policy measures, including tax incentives. Meanwhile, since the Korean and Indonesian petrochemical markets are separate, the production of petrochemical products at LCI is expected to have only a limited impact on Korea’s market supply and exports.

LCI was constructed as a plant with high energy efficiency and carbon reduction performance, based on advanced design technology accumulated in Korea. In addition to naphtha, the main feedstock, the facility is designed to use up to 50% LPG, maximizing cost savings and operational efficiency. Furthermore, by introducing the Asset Information Management (AIM) solution-essential for smart process implementation-LCI digitally integrates and manages all operational data and 3D modeling of equipment, thereby strengthening preventive maintenance and enhancing productivity.

Meanwhile, Lotte Chemical Titan Nusantara (LCTN), located nearby and producing 450,000 tons of polyethylene (PE), has achieved vertical integration by sourcing ethylene from Lotte Chemical Indonesia instead of relying on imports. By switching from maritime transport to an on-site pipeline connection for ethylene supply, the company also expects to improve profitability by reducing logistics costs.

This content was produced with the assistance of AI translation services.