Jakarta. Sovereign funds Danantara Indonesia and Indonesia Investment Authority (INA) announced Tuesday they had agreed to jointly invest $200 million in Chandra Asri Group’s Chlor Alkali – Ethylene Dichloride (CA-EDC) project.

This conditional share subscription agreement follows an earlier memorandum of understanding between the three. It also marks the capital commitment phase to support the development of the CA-EDC plant in Cilegon, Banten, developed and operated by Chandra Asri Group. The project aims to cut reliance on imports of critical raw materials across various industries, while advancing downstream industrialization as part of Indonesia’s long-term economic transformation agenda. Increasing domestic caustic soda production capacity is expected to significantly strengthen import substitution and domestic supply resilience. EDC production will not only support domestic industrial demand but also has the potential to boost exports and contribute to foreign exchange earnings, in line with enhancing the competitiveness of the national chemical industry.

The CA-EDC plant development has a total project value of $800 million and is part of a National Strategic Project (PSN) focused on producing essential raw materials for upstream and downstream industries. Caustic soda is widely used in the production of soap and detergents, alumina refining, and paper manufacturing. EDC is a mainstay raw material for construction and packaging industries.

Under the agreed investment structure, Danantara Indonesia and INA will jointly invest a total of $200 million. The funding will go into developing the CA-EDC industrial facility managed by Chandra Asri Alkali (CAA), a subsidiary of Chandra Asri Group. The plant is expected to enter operations next year.

“Today’s agreement reaffirms Danantara Indonesia’s commitment to strengthening strategic national industries that generate high value-add, create employment opportunities, and accelerate Indonesia’s economic growth. This collaboration is not only a response to import dependency challenges, but also a concrete step toward advancing downstream industrialization, a key driver of Indonesia’s economy,” Danantara Chief Investment Officer Pandu Sjahrir said.

Eddy Porwanto, the acting chief executive officer of INA, said that the investment reflected the fund’s long-term mandate to mobilize capital into sectors that are national priorities.

“Together with Chandra Asri Group, as Indonesia’s largest integrated petrochemical industry player and a leading company in Southeast Asia, and Danantara Indonesia, as a long-term investment partner, this collaboration aims to establish a strong capital foundation to sustainably expand strategic raw material industrial capacity. Through this initiative, we aim to advance downstream industrial development, enhance domestic value creation, and strengthen the competitiveness and resilience of Indonesia’s industrial sector,” Eddy said.

President Director and CEO of Chandra Asri Group Erwin Ciputra welcomed the strategic investment.

“This support reflects confidence in Chandra Asri Group’s capability to develop this facility. We expect the CA-EDC project to significantly reduce dependency on imported strategic chemicals, strengthen national supply chain resilience, and support downstream industrialization. Furthermore, the construction and operation of this facility will create approximately 3,000 jobs during the construction phase and 250 jobs during operations, while delivering sustainable benefits to the communities and industries in Cilegon and surrounding areas,” he said.

In its first phase, the CA-EDC plant will have an annual production capacity of 400,000 tons of caustic Soda and 500,000 tons of ethylene dichloride. 

The facility’s development promises to follow high industrial technology and safety standards to ensure operational efficiency, supply reliability, and compliance with sustainability principles.