"The high global demand for fiberglass finally motivated me to urge them to open a factory in Indonesia,” Luhut said on Tuesday (23/5).

Luhut emphasized that the establishment of a fiberglass factory in Indonesia can strongly support the downstream industry program that Presiden Joko Widodo is actively promoting.

Moreover, Luhut highlighted Indonesia’s plentiful reserves of silica sand, the primary raw material used in the fiberglass industry.

“Therefore, silica sand will not only be mined and exported raw but will conceive tens of thousands of derivative industries that will increase added value.” Luhut added.

Indonesia’s silica sand reserves

Based on the 2021 data from the Ministry of Energy and Mineral Resources, Indonesia possesses an immense potential for silica sand resources, estimated at 25 billion tons, with reserves currently standing at 330 million tons. These abundant resources are spread across 23 provinces. However, Indonesia’s silica sand production remains comparatively low in relation to other countries. One of the contributing factors to this situation is that Indonesia still lacks investors willing to participate in the upstream sector, particularly in silica sand mining and processing.

Chinese glass companies' eye in Indonesia

The news surrounding the China glass company’s expansion into Indonesia has been circulating since 2022. At that time, the Ministry of Investment announced that two Chinese firms had presented investment proposals to process silica sand in Indonesia into glass and other products.

Among these companies is Xinyi Solar Energy, a subsidiary of Xinyi Glass Holding, which specializes in solar panels and plans to invest a substantial amount of up to US$3 billion to secure the supply of silica sand in Bangka Belitung. Xinyi Holding, known for its diverse range of glass products, also seeks to secure land for establishing a production hub in Southeast Asia.

After Xinyi, the spotlight shifted to Jushi as the company visited in 2022 to survey and research the possibility of establishing a factory in Indonesia. Jushi seeks Indonesia as a crucial source of silica sand and a hub for establishing distribution networks that can serve Southeast Asian countries to Australia.

Jushi, through its subsidiaries, already has factories in China, the US, and even Egypt.