The Ministry of Industry has recommended investors in the lubricant industry to build plants outside of Java Island amid significant vehicular mobility and high demand across various regions.
Emmy Suryandari, Director of Downstream Chemicals and Pharmaceuticals at the Ministry of Industry, revealed that out of the 52 lubricant producers in Indonesia, the installed capacity currently stands at 2 million liters per year with production at 1.2 million liters per year.
“While the majority of lubricant industries are currently located in Java Island, I hope that in the future, there will be investments in lubricant industries operating outside Java,” Emmy said in Jakarta on Monday, March 4, 2024.
Emmy emphasized that by attracting investments outside Java, the industrial supply chain can be reached more efficiently, fostering economic growth across diverse regions. Moreover, the lubricant industry is considered a significant job creator. According to ministry’s records, the lubricant industry employed approximately 4,898 individuals by the year 2023.
In this context, she commended the expansion investment in grease lubricant production by Shell Indonesia at the Lubricants Oil Blending Plant (LOBP) in Marunda, West Java, with a capacity of up to 12 million liters per year.
“This demonstrates that Indonesia can maintain its investment attractiveness due to its substantial market size, abundant resources, economic growth, and stakeholder collaboration to implement government regulations,” she noted.
Emmy expressed confidence in the immense lubricant market potential in Indonesia, driven by the increasing use of motor vehicles and industrial machinery. This sentiment is supported by the increased investment in the manufacturing sector, with the processing industry recording an investment growth of 40 percent higher in the fourth quarter of 2023 compared to the same period in 2022.
Of the total investment value, she explained that the manufacturing sector contributed 44.4 percent to Indonesia’s total investment in the second quarter of 2023, amounting to Rp365.8 trillion (US$23.5 billion).
