Indonesia is taking a major step toward strengthening its industrial base and reducing reliance on imported raw materials with the signing of a Memorandum of Understanding (MoU) between the State investment management agency Danantara, the Indonesia Investment Authority (INA), and petrochemical and energy giant PT Chandra Asri Pacific (TPIA).

The agreement outlines planned development of a Chlor-Alkali and Ethylene Dichloride (CA-EDC) production facility, which will be managed by a Chandra Asri subsidiary. As part of the deal, Danantara and INA are prepared to invest up to US$800 million (Rp13 trillion) in the project.

“This initiative is a concrete step to strengthen the supply of critical industrial raw materials domestically and expand Indonesia’s export base,” Pandu Sjahrir, Chief Investment Officer of Danantara, said on Tuesday, June 17, 2025.

The upcoming plant is expected to produce 400,000 tons of solid caustic soda and 500,000 tons of ethylene dichloride annually. These materials are vital for key industrial sectors, including manufacturing and energy transition, especially in nickel processing and alumina refining.

The partnership demonstrates a shared commitment to reinforcing Indonesia’s industrial resilience, supporting job creation, and adding value to the country’s manufacturing capabilities. The project aligns with the government’s National Strategic Project (PSN) agenda and its broader ambition to achieve 8 percent national economic growth.

Ethylene dichloride from the facility will primarily be exported, potentially generating up to Rp5 trillion in annual foreign exchange revenue. Meanwhile, domestic caustic soda production could save the country up to Rp4.9 trillion annually by cutting import dependency.

“The involvement of Danantara and INA highlights investor confidence in Indonesia’s growing chemical industry. Through this collaboration, we are laying a strong foundation for sustainable industrial development and national economic growth,” Erwin Ciputra, President Director of Chandra Asri Group, said.

This high-profile collaboration marks a key milestone in Indonesia’s long-term economic transformation, signaling strong momentum toward industrial self-sufficiency and export-driven growth.