1 agenda5.indonesia petrochemical 2

11

Current and Future Current and Future Outlook of Outlook of

Petrochemical Industry Petrochemical Industry and EPA/FTA in the and EPA/FTA in the Chemical IndustryChemical Industry

Ministry of IndustryMinistry of IndustryRepublic of IndonesiaRepublic of IndonesiaManila, 8 July 2007Manila, 8 July 2007

22

The topics are :The topics are :The current state of the petrochemical industry, The current state of the petrochemical industry, commenting on the position of industrial structure commenting on the position of industrial structure relation with :relation with :-- refineriesrefineries-- procurement of source materialsprocurement of source materials-- production capacityproduction capacity-- comparative advantage and comparative advantage and disadvantagedisadvantage-- problemsproblemsAs well as future outlook 2010 such as changes in As well as future outlook 2010 such as changes in competitiveness and production capacity, long competitiveness and production capacity, long term issues, etc.term issues, etc.The positions on EPA/FTA policies in the chemical The positions on EPA/FTA policies in the chemical industry.industry.

44

1. The current state of the petrochemical industry, 1. The current state of the petrochemical industry, commenting on the position of industrial structurecommenting on the position of industrial structure

Petrochemical Product is strategic, because it is Petrochemical Product is strategic, because it is used to be raw material of downstream industry used to be raw material of downstream industry such as textile, plastic, synthetic rubber, such as textile, plastic, synthetic rubber, cosmetics, pesticides, cleaning agent, coloring cosmetics, pesticides, cleaning agent, coloring agent, pharmaceutical substances, explosive agent, pharmaceutical substances, explosive agent, fuel, synthetic leather, etc) agent, fuel, synthetic leather, etc) Nowadays, Indonesia developing olefin centre Nowadays, Indonesia developing olefin centre (ethylene, propylene, etc) aromatic centre (ethylene, propylene, etc) aromatic centre (benzene, toluene, (benzene, toluene, xylenexylene, etc) and methane , etc) and methane based (ammonia, methanol, etc).based (ammonia, methanol, etc).Petrochemical product usage per capita in Petrochemical product usage per capita in Indonesia is lower than other ASEAN countriesIndonesia is lower than other ASEAN countries

55

Australia

ACEH1. Asean Aceh Fertilizer, PT2. Dyno Mugi Indonesia, PT3. Pupuk Iskanda Muda, PT

Malaysia

Philippines

NORTH SUMATRA1. Belawan Deli Chemical PT.2. RGM Glue, PT3. Superin, PT

JAMBI1. Putra Sumber Kimindo, PT.2. Sabak Indah, PT.

SOUTH SUMATRA.1. Pertamina, PN.2. Pupuk Sriwidjaya, PT.3. Sri Melamine, PT.4. Sulsel Prima Pratama, PT.5. Uforin Prajen, PT.

WEST KALIMANTAN1. Benua Multi Lestari, PT.2. Duta Pertiwi Nusantara, PT.3. Duta Rendra, PT.4. Kurnia Kapus Utama GI, PT.

CENTRAL KALIMANTAN1. Korindo Ariabima Sari, PT

SOUTH KALIMANTAN1. Austral Byna, PT.2. Binajaya Rodakarya, PT.3. Intan Wijaya Internasional, PT.4. Gelora Citra Kimia Abadi, PT.5. Giat Ultra Chemical, PT.

RIAU1. Korindo Abadi, PT.2. Perawang Perkasa, PT.

EAST KALIMANTAN1. Batu Penggal Chemical, PT.2. Balik Papan Forest, PT.3. Cakram Utama Jaya, PT.4. DSM Kaltim Melamine, PT.5. Fintra Hamka Mandiri, PT.6. Inne Donghwa, PT.7. Kaltim Hexamindo, PT.8. Kaltim Hexamindo W., PT.9. Kaltim Methanol Industry, PT.10. Kaltim Pacific Amoniak, PT.11. Kaltim Parna Industri, PT.12. Lakosta Indah, PT.13. Pertamina, PN14. Prima Adhenas, PT.15. Pupuk Kalimantan Timur, PT.

MALUKU1. Nusa Prima Pratama Industry, PT.2. Wira Nusa Trisatrya, PT.

PAPUA1. Kayu Lapis Indonesia, PT.2. Kodeco Memberamo, PT.

JAKARTA.1. Eastern Polymer, PT.2. Findeco Jaya, PT.3. Justus Sakti, PT.4. Pulosynthetic, PT.5. Sayap M Utama, PT.

21. Polypet Karya Persada, PT..22. Polychem Lindo Inc., PT. 23. Polyprima Karyareksa, PT. 24. Rhone Poulenc Indolatex, PT. 25. Risjad Brasali Styrene, PT. 26. Sari Dahin Plasindo, PT. 27. Satomo Indovyl Monomer, PT..28. Satomo Inovyl Polymers, PT. 29. Sentra Sintetikajaya, PT. 30. Showa Esterindo Indonesia, PT. 31. Standard Toyo Polimer, PT. 32. Styrindo Mono Indonesia, PT. 33. Sulfindo Adi Usaha, PT.34. Sunkyoang Keris Adiputra, PT. 35. Timur Raya Tunggal, PT. 36. Tri Polyta Indonesia, PT. 37. Unggul Indah Corp., PT.

CENTRAL JAVA1. Indo Acidatama Chem. Ind., PT.2. Kayu Lapis Indonesia, PT.3. Pertamina

EAST JAVA1. Aktif Indonesia Indah, PT.2. Akzo Nobel Raung Resin, PT.3. Albright & Wislon manyar, PT.4. Arjuna Utama Kimia, PT.5. Eterindo Nusa Graha, PT.6. Golden Bridge Chemicals, PT.7. Maspion Styrene, PT.8. Mitsui Eterindo Chemical, PT.9. Pamolite Adhesive, PT.10. Petro Oxo Nusantara, PT.11. Petrokimia Gresik, PT.12. Petrokimia, PT.13. Petrowidada, PT.14. Samator Inti Peroxide, PT.15. Siam Maspion Polymer, PT.16. Sindopex Perotama, PT.

LAMPUNG1. Intan Prima Tani, PT

BANTEN1. Amoco Mitsui PTA Indonesia, PT. 2. Asahimas Subentra Chemicalk, PT. 3. Buana Sulvindo, PT. 4. Cabot Indonesia, PT. 5. Chandra Asri, PT. 6. Dong Jin Indonesia, PT. 7. Dow Polymers Indonesia, PT.8. Dover Chemical, PT. 9. Eternal Buana Chemical, PT. 10. GT. Petrochem Ind.ustries Tbk., PT.11. Indonesia Kasai Prakarsa, PT. 12. Indopolymers Adipura, PT. 13. Karbon Indonesia, PT. 14. Lyondell Indonesia, PT. 15. Mitsubishi Chemical Indonesia, PT.16. Mulya Adhi Paramita, PT. 17. Nippon Shokubai Indonesia, PT. 18. Pardic Chemical, PT. 19. PENI, PT. 20. Petnesia Resindo, PT. 21. PIPI, PT.

WEST JAVA1. Arindo Pacific Chemical, PT. 2. Aristek High Polymer, PT.3. B ASF Indonesia, PT. 4. Branta Mulia, PT.5. Dayin Prima Paint, PT. 6. Exor, PT. 7. Henkel Indonesia, PT.8. Henoch Jaya Chem. Industri, PT. 9. Herbert Indonesia, PT.10. Indorama Synthetics Interindo, PT. 11. Peroxide Indonesia Pratama, PT. 12. Polysindo Eka Perkasa, PT. 13. Polytama Propindo, PT.

14. Pupuk Kujang, PT. 15. Risyad Brasali Peroksida, PT.16. Sintas Kurama Perdana, PT.17. Tunas Sumber Idea Kreasi, PT. 18. Unilever Indonesia, PT.19. Union Carbide, PT.20. Warna Agung, PT.

Principal Location Petrochemical Industry in IndonesiaPrincipal Location Petrochemical Industry in Indonesia

77

Irian Jaya

ACEH

Malaysia

Australia

Sumatera Utara

Sumatera Selatan

Jawa BaratJawa Timur

Jawa Tengah

Kalimantan Timur

Sulawesi Selatan

1.109,35

323,88

72,98

221,6

5.705,08

748,45

1.236,74100,96

Sumatera Tengah

1. Total = 9.826 MMSTB (2002)2. R / P = 17 Year

: Petroleum Stock (MMSTB)

Figure 2 : Petroleum Stock

Source of Raw Material for Petrochemical IndustrySource of Raw Material for Petrochemical Industry

88

Grissik

Semarang

Figure 3 : Stock and Infrastructure of National Natural Gas

Pacific Ocean

AUSTRALIA

Indian Ocean

Bangkok

Phnom Penh

Ban Mabtapud

Ho Chi Minh City

CAMBODIA

VIETNAM

THAILAND LAOS

Khanon

Songkhla

Erawan

Bangkot

LawitJerneh

WESTMALAYSIA

Penang

Kerteh

Kuala Lumpur

Manila

Philipines

South

China

Sea

Sin

gapo

re

Gas

Tr

unkl

ine

NatunaAlpha

Kota KinibaluBRUNEI

Bandara Seri Begawan

BintuluEAST

MALAYSIA

Kuching

Banda Aceh

Lhokseumawe

Medan

Duri

Padang

S U M A T R A Jambi

BintanSINGAPORE

Samarinda

Balikpapan

Bontang LNG Plant& Export Terminal Attaka

TunuBekapai

KALIMANTAN

Banjarmasin

Manado

SULAWESI

Ujung Pandang

BURU SERAM

Ternate HALMAHERA

Sorong

PAPUA

JakartaJ A V A Surabaya

Bangkalan

BALI SUMBAWA

Pagerungan

LOMBOK

Cirebon

FLORES

SUMBATIMOR

I N D O N E S I A

Duyong

Port Dickson

Port Klang

Mogpu

Dumai

Batam

Guntong

96.030 STOCK P1 (BSCF)

ArdjunaFields

MADURA

Existing Pipeline

Planned Pipeline

Jayapura

Merauke

512

1.017

2.995

7.485

1.204

3.755

19.646

31.955 3.119

25.129

1.7652.640

3.977

14.531

588

2.794

2.400

2.260 Maluku Selatan

STOCK P2 (BSCF)38.131

1.088

4.731177

446

660

1.544

West Natuna

Palembang

Source : Ministry of Energy and Mineral Resource

1010

1. 1. Demand Of Plastic Monomers & Polymers Indonesia Demand Of Plastic Monomers & Polymers Indonesia 1995 1995 –– 2015 (Actual & Forecast) In 000 MT2015 (Actual & Forecast) In 000 MT

ProductsProducts 19951995 19961996 19971997 20032003 20042004 20052005 200620062011 2011

**2015 2015

**

11 EthyleneEthylene 449449 676676 707707 11971197 13141314 14321432 15611561 21472147 26092609

22 PropylenePropylene 280280 514514 466466 750750 818818 892892 972972 13371337 16251625

33 Styrene MonomerStyrene Monomer 8585 106106 104104 220220 242242 265265 302302 443443 581581

44Vinyl Chloride Vinyl Chloride Monomer Monomer 238238 297297 409409 348348 376376 406406 438438 572572 722722

55 Polyethylene Polyethylene 463463 578578 563563 783783 861861 947947 10231023 14211421 17951795

66 PolypropylenePolypropylene 494494 561561 611611 720720 792792 871871 958958 13781378 17031703

77 PolystyrenePolystyrene 5959 7575 8181 128128 141141 155155 170170 246246 305305

88 Poly Vinyl Chloride Poly Vinyl Chloride 265265 311311 319319 375375 413413 454454 499499 745745 10241024

1111

2. 2. Supply Demand & Balance (FORECAST) of Principal Supply Demand & Balance (FORECAST) of Principal Olefin productOlefin product

ProductsProducts 20062006 20072007 20082008 20092009 20102010 20112011 20122012 20132013 20142014 20152015

11 EthyleneEthylene

Capacity (a) Capacity (a) 600600 600600 12001200 12001200 17001700 17001700 17001700 17001700 17001700 17001700

Production (b) Production (b) 585585 585585 10201020 11201120 16151615 16501650 16751675 16751675 16751675 16751675

Utilization (%) Utilization (%) (b/a)(b/a) 9898 9898 8585 9393 9595 9797 9999 9999 9999 9999

Import (c) Import (c) 996996 11361136 855855 878878 480480 547547 630630 743743 861861 985985

Export (d)Export (d) 2020 2020 2020 5050 5050 5050 5050 5050 5050 5050

Trade Balance (Trade Balance (cc--dd) ) 976976 11161116 835835 828828 430430 497497 580580 693693 811811 935935

Demand (e) Demand (e) 15611561 17011701 18551855 19481948 20452045 21472147 22552255 23682368 24862486 26102610

Balance (Balance (bb--ee) ) --976976 --11161116 --835835 --828828 --430430 --497497 --580580 --693693 --811811 --935935

22 PropylenePropylene

Capacity (a) Capacity (a) 630630 830830 10301030 10301030 15001500 15001500 15001500 15001500 15001500 15001500

Production (b) Production (b) 598598 788788 978978 10101010 14251425 14701470 14701470 14701470 14701470 14701470

Utilization (%) Utilization (%) (b/a)(b/a) 9595 9595 9595 9898 9595 9898 9898 9898 9898 9898

Import (c) Import (c) 374374 271271 177177 203203 00 00 00 44 7878 155155

Export (d)Export (d) 00 00 00 00 152152 133133 6666 00 00 00

Trade Balance (Trade Balance (cc--dd) ) 374374 271271 177177 203203 --152152 --133133 --6666 44 7878 155155

Demand (e) Demand (e) 972972 10591059 11551155 12131213 12731273 13371337 14041404 14741474 15481548 16251625

Balance (Balance (bb--ee) ) --374374 --271271 --177177 --203203 152152 133133 6666 --44 --7878 --155155

1212

Products (in thousand Products (in thousand tonnestonnes)) 20002000 20012001 20022002 20032003 20042004 20052005

11 UreaUrea

Capacity (a) Capacity (a) 6.1626.162 6.7326.732 7.3027.302 7.3027.302 7.3027.302 7.8277.827

Production (b) Production (b) 5.7075.707 5.1745.174 5.3915.391 5.4235.423 5.6715.671 5.8845.884

Utilization (%) (b/a)Utilization (%) (b/a) 92.6292.62 76.8676.86 73.8373.83 74.2874.28 77.6777.67 74.7574.75

Import (c) Import (c) 00 00 00 00 00 00

Export (d)Export (d) 1.4911.491 975975 754754 939939 495495 797797

Trade Balance (Trade Balance (cc--dd) ) --1.4911.491 --975975 --754754 --939939 --495495 --797797

Demand (e) Demand (e) 4.0094.009 4.2184.218 4.1534.153 4.5884.588 5.0225.022 5.2015.201

Balance (Balance (bb--ee) ) 1.6971.697 955955 1.2381.238 835835 649649 683683

22 NonNon--Urea (SPUrea (SP--36+ZA+NPK)36+ZA+NPK)

Capacity (a) Capacity (a) 1.8501.850 1.8501.850 1.8501.850 1.8501.850 1.8501.850 1.8501.850

Production (b) Production (b) 1.0411.041 1.2211.221 1.0651.065 1.1011.101 1.3601.360 1.7521.752


Import (c) Import (c) 345345 325325 528528 444444 600600 635635

Export (d)Export (d) 00 00 00 00 00 00

Trade Balance (Trade Balance (cc--dd) ) 345345 325325 528528 444444 600600 635635

Demand (e) Demand (e) 11321132 11941194 16701670 13641364 16141614 17911791

Balance (Balance (bb--ee) ) --9191 2727 --605605 --263263 --254254 --3939

3. 3. Supply Demand & Balance (Actual) of FertilizerSupply Demand & Balance (Actual) of Fertilizer

1313

4. 4. Supply Demand & Balance (Actual) of Aromatic ProductSupply Demand & Balance (Actual) of Aromatic Product


11 BenzeneBenzene

Capacity (a) Capacity (a) 123123 123123 123123 123123 123123 123123

Production (b) Production (b) 9393 8383 8080 8888 8888 8888


Import (c) Import (c) 244244 257257 297297 306306 315315 324324

Export (d)Export (d) 6060 5858 6262 6767 7272 7878


Demand (e) Demand (e) 277277 281281 315315 327327 338338 349349

Balance (Balance (bb--ee) ) -- 184184 --202202 --235235 --239239 --250250 -- 261261

22 TolueneToluene



Utilization (%) (b/a)Utilization (%) (b/a) 00 00 00 00 00 00

Import (c) Import (c) 7878 8080 8686 9494 9999 104104

Export (d)Export (d) 00 00 00 0.10.1 00 00

Trade Balance (Trade Balance (cc--dd) ) 7878 8080 8686 93.993.9 9999 104104

Demand (e) Demand (e) 7878 8080 8686 9494 9999 104104

Balance (Balance (bb--ee) ) --7878 --8080 -- 8686 -- 9494 -- 9999 -- 104104

1414


33 XyleneXylene



Utilization (%) (b/a)Utilization (%) (b/a) 85.5685.56 81.4881.48 90,7490,74 94.494.4 95.895.8 102102

Import (c) Import (c) 921921 976976 1.0041.004 1.0511.051 11001100 11511151

Export (d)Export (d) 8989 9191 9494 110110 128128 150150


Demand (e) Demand (e) 1.1391.139 1.2131.213 1.2281.228 1.2351.235 1.3291.329 1.3961.396

Balance (Balance (bb--ee) ) -- 908908 -- 993 993 --983983 -- 980980 -- 964964 -- 11201120

4. 4. Supply Demand & Balance (Actual) of Aromatic Product Supply Demand & Balance (Actual) of Aromatic Product (continued)(continued)

1515

Problems in Petrochemical IndustryProblems in Petrochemical Industry

Capacity utilization of petrochemical industry is still below thCapacity utilization of petrochemical industry is still below the installed e installed

capacity. capacity.

Petrochemical industry is not fully integrated with primary induPetrochemical industry is not fully integrated with primary industry (Oil and stry (Oil and

gas as raw material supplier). Downstreamgas as raw material supplier). Downstream--intermediateintermediate--upstream upstream

petrochemical industry is not integrated. In future, petrochemicpetrochemical industry is not integrated. In future, petrochemical industry al industry

must be developed using cluster approach.must be developed using cluster approach.

The relation between Stakeholder and industrial agent must be The relation between Stakeholder and industrial agent must be

harmonized. It need to create cooperation between them to get siharmonized. It need to create cooperation between them to get singular ngular

likelike--minded. minded.

Relation between stakeholder and regional government must harmonRelation between stakeholder and regional government must harmonize ize

based on the prevailing of Regional Autonomy Act in Indonesia. based on the prevailing of Regional Autonomy Act in Indonesia.

Research and Development (R&D) in petrochemical sector must be Research and Development (R&D) in petrochemical sector must be

increased in science and application development.increased in science and application development.

1616

StrategyStrategy

Utilization Improvement :Utilization Improvement :Wider foreign and domestic market domination and dissemination oWider foreign and domestic market domination and dissemination of f market informationmarket informationIncreasing in usage and efficiency of domestic fuel.Increasing in usage and efficiency of domestic fuel.Integration between Oil and gas with petrochemical industry to Integration between Oil and gas with petrochemical industry to create workcreate work--climate competitiveness. climate competitiveness.

Empower the Industrial Structure in every level of value chain Empower the Industrial Structure in every level of value chain ::Increasing added value by rise the local component composition (Increasing added value by rise the local component composition (raw raw material, capital goods,, Human Resources, technology, constructmaterial, capital goods,, Human Resources, technology, construction ion and maintenance services, and local capital and maintenance services, and local capital Creating conducive investmentCreating conducive investment--climate by giving fiscal monetary, and climate by giving fiscal monetary, and administration incentives including law enforcement and securityadministration incentives including law enforcement and securitystability. stability. Development of environmentalDevelopment of environmental--friendly and sustainability industry friendly and sustainability industry and Human Resources ability.and Human Resources ability.

1717

Future Technology Development :Future Technology Development :Increasing the transfer of technology by using expired license Increasing the transfer of technology by using expired license technology in petrochemical industry and it developed appropriattechnology in petrochemical industry and it developed appropriate e with local potentialwith local potentialApplying licenses of process technology and it cooperate togetheApplying licenses of process technology and it cooperate together r with license ownerwith license owner

Develop the Cluster of Petrochemical Industry in Develop the Cluster of Petrochemical Industry in certain locationcertain location

CC1 1 based Product based Product : Bontang, East Kalimantan Province: Bontang, East Kalimantan ProvinceAromatic based Product Aromatic based Product : Tuban: Tuban--Gresik, East Java ProvinceGresik, East Java ProvinceOlefin based product Olefin based product : Anyer: Anyer--MerakMerak--Cilegon, Banten ProvinceCilegon, Banten Province

StrategyStrategy (continued)(continued)

1818

PoliciesPolicies

•• Arrangement allocation of local resources as petrochemical Arrangement allocation of local resources as petrochemical

industry raw materialindustry raw material

•• Arrangement of waste/scrap/used product petrochemical Arrangement of waste/scrap/used product petrochemical

as raw materialas raw material

•• Arrangement of raw material and energy efficiency by Arrangement of raw material and energy efficiency by

diversification and saving.diversification and saving.

•• Arrangement of alternativeArrangement of alternative--energy development such as energy development such as

coal and biomass gasification.coal and biomass gasification.

1919

•• Arrangement of human resources development by increasing Arrangement of human resources development by increasing

national worknational work--competence standardcompetence standard

•• Arrangement of infrastructure development related in Arrangement of infrastructure development related in

petrochemical industry by private sector, central and regional petrochemical industry by private sector, central and regional

government.government.

•• Arrangement the policies to encourage local production Arrangement the policies to encourage local production

usage.usage.

•• Arrangement of tax incentives to encourage investment in Arrangement of tax incentives to encourage investment in

petrochemical industrypetrochemical industry

•• Arrangement of incentive to create integrated and highArrangement of incentive to create integrated and high--

quality R&D development.quality R&D development.

Policies (continued)Policies (continued)

2020

2.2. The positions on EPA/FTA policies in the chemical The positions on EPA/FTA policies in the chemical industry.industry.

Indonesia undertook international cooperation, both bilaterally Indonesia undertook international cooperation, both bilaterally and and multilaterally and through a number of regional and internationamultilaterally and through a number of regional and international l cooperation forums within a framework of support for national incooperation forums within a framework of support for national industrial dustrial development and market access.development and market access.

Indonesia as one of ASEAN members join in ASEAN FTA cooperation Indonesia as one of ASEAN members join in ASEAN FTA cooperation ::ASEAN ASEAN ––Korea Free Trade Area, 100% tariff commodities will be Korea Free Trade Area, 100% tariff commodities will be eliminated in the year 2012.eliminated in the year 2012.ASEANASEAN--China Free Trade Agreement, sensitive list will be 0% in China Free Trade Agreement, sensitive list will be 0% in 2012 and highly sensitive in 2020.2012 and highly sensitive in 2020.ASEANASEAN--Australia/New Zealand FTA, 100% commodities tariff will be Australia/New Zealand FTA, 100% commodities tariff will be eliminated in the year 2015.eliminated in the year 2015.

In bilateral cooperation :In bilateral cooperation :IndonesiaIndonesia--Japan Economic Partnership Agreement (IJJapan Economic Partnership Agreement (IJ--EPA).EPA).

2121

THANK YOUTHANK YOU

1 agenda5.indonesia petrochemical 2

Documents

petrochemical product

current state

explosive agent

cleaning agent

coloring agent

future outlook of outlook

synthetic rubber

epafta policies