Minister of Industry: Petrochemical Industry Has Important Role Reduce Trade Balance Deficit

By : Ridwan And Aldi Firhand. A | Sunday, July 08 2018 - 20:45 IWST

Minister of Industry Airlangga Hartarto
Minister of Industry Airlangga Hartarto

INDUSTRY.co.id - Bontang, Amid the deficit of the trade balance, the chemical industry such as ammonium nitrate producers play an important role to substitute imports because its production capacity is able to meet the needs of the domestic market.

This was stated by the Minister of Industry Airlangga Hartarto during a working visit at PT Pupuk Kaltim, Bontang, East Kalimantan, Saturday (7/7/2018).

"We push domestic market more optimally, and continue to be encouraged for export," said Minister of Industry.

Moreover, Ministry of Industry actively spur the development of industrial sectors that have the potential to increase the value of national exports.

"The government has developed medium and long term solutions, namely through import and investment substitution, while the short term is like limiting import of ammonium nitrate, because the domestic industry is sufficient," he explained.

The Minister of Airlangga also revealed that the chemical industry cluster in Bontang still has great potential for the development of downstream products such as dimethyl ether which can be used as LPG replacement fuel source, ammonium nitrate based compound fertilizer, soda ash, and ammonium chloride fertilizer.

In addition, the area of ​​East Kalimantan also has prospects for palm oil plantation development as a source of raw materials for oleochemical based industry clusters as a solution to the significant decrease in palm oil prices in recent years in order to overcome the trade balance deficit.

"The development capability can be realized with the guarantee of natural gas supply for domestic, import quota policy for certain superior products and synergy with the development of technology research," he explained.
 

Ministry of Industry noted, the natural gas needs for industries operating in Bontang reach 452 MMSCFD or about 59 percent of the domestic gas use in East Kalimantan. This needs to be a big concern for long term gas supply guarantees at reasonable prices.

"So it can maintain the continuity of all industrial activities to be more developed with a strong and sustainable structure," said Director General of Chemical, Textile and Aneka Industries (IKTA) Achmad Sigit Dwiwahjono.
 

However, currently around 804 MMSCFD of natural gas from East Kalimantan are still being exported abroad. Considering these conditions and considering the declining supply of natural gas, the Ministry of Industry sees the need for the preferred use of natural gas to domestic industries.
 

"So, it is necessary to ensure that there is no extension of supply for contracts of natural gas sales abroad so that the existing gas supply in East Kalimantan can be prioritized to domestic needs, especially the continuity of the petrochemical industry in Bontang," Sigit said.

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