Jakarta. Investment Minister Bahlil Lahadalia announced Wednesday that the Cilegon petrochemical project by South Korean giant Lotte Chemical will start production next year after a long delay.

Lotte Chemical is investing billions of dollars to build a petrochemical complex in the Banten city of Cilegon. The project got stuck for years due to overlapping land issues with the state-owned steelmaker Krakatau Steel. Lotte Chemical held the groundbreaking ceremony for the plant in 2018. Fast forward to now, the plant -- which will likely help Indonesia cut its chemical imports -- is about to finish construction.

“Lotte Chemical has invested [almost] $4 billion in the Cilegon plant. We all know how the project once stalled in 2016, but now the [construction] is nearing completion,” Bahlil said in Karawang on Wednesday.

“So I expect the [Lotte Chemical] plant to start producing by March 2025,” Bahlil said.

In 2019, Lotte Chemical signed a memorandum of understanding to settle the overlapping land problem with Krakatau Steel. Lotte Chemical was building the factory on land belonging to the steel producer. 

Data shown during Bahlil’s remarks showed that the actual construction works began in 2022. The $3.9 billion project is now 90 percent complete. As of the first quarter of 2024, the project has used up 79.6 percent of the investment. The plant will produce a total of 17 products. 

Last September, Jokowi visited the Lotte Chemical Indonesia plant in person. Jokowi said at the time that 70 percent of what the plant produces would go into meeting the domestic demand, while the remaining 30 percent would go into exports.

According to Chief Economic Minister Airlangga Hartarto earlier this year, the Lotte Chemical Indonesia plant will produce 1 million tons of ethylenes in 2025. The annual output will also include 520,000 tons of propylenes and 250,000 tons of polypropylene. The project is expected to create job opportunities for up to 15,000 people during the construction, and will likely hire around 1,300 people once it starts commercial operations.