Petrochemical Industry Honam Plans Petrochemical Production Plant in Indonesia

Editor: Dominik Stephan

Korean Honam Petrochemical plans the construction of a million–tons–per–year petrochemical production in Idonesia. A memorandum of understanding with a local steel firm for the acquisition of needed building area is already underway, insiders say.

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(Picture: Wikimedia Commons)
(Picture: Wikimedia Commons)

Jakarta/Indonesia – Honam Petrochemical, the second-largest petrochemical producer in Asia, plans the construction of a new US $ 5 billion petrochemical complex in Cilegon, Indonesia, reported the local Jakarta Post. Construction works are planned for 2013, Honam's senior managing director of business development, Kim Gyo-hyun is quoted. "We anticipate that the construction will be completed by 2016, but the Industry Minister (MS Hidayat) expects it can be finished faster," Kim told the press.

Only recently Honam had signed a memorandum of understanding (MoU) with Indonesian public steel company Krakatau Steel, which would provide 40 hectares of land out of the total of 60 needed to set up the compound. Currently, the project undergoes a first feasibility study, with financial issues remaining open for later, more detailed plans.

According to Kim, the facility would use local supplies of raw materials whenever possible. Due to the limited domestic production, imports were nevertheless inevitable, Kim is quoted. Based on the firm's proposal, an annual production of one million tons of ethylene, 550,000 tons of propylene, 600,000 tons of polyethylene, 700,000 tons of mono ethylene glycol, 600,000 tons of polypropylene and 140,000 tons of butadiene is expected.

This production capacity could help the Indonesian plastics industry to overcome its dependency on imported raw materials, industry experts believe. Currently, most feedstock for local plastics and polymers producers is imported from other ASEAN countries, the Middle East, the United States and Europe.