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ECONOMIC AND MANUFACTURING INDUSTRY GROWTHindonesiangassociety.com/storage/2016/06/Keynote-3-Harjanto.pdf · 7 east kalimantan 505 523 523 526 8 east sulawesi 0 0 0 0 9 central sulawesi

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    ECONOMIC AND MANUFACTURING INDUSTRY GROWTH

    Source: BPS, processed by MoI 2014

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    SECTORS 2009 2010 2011 2012 2013 TW I 2013 TW I 2014

    1). Foods, Beverages and Tobacco 11,22 2,78 9,14 7,57 3,34 1,75 9,47 2). Textiles, Leather products and Footwears 0,60 1,77 7,52 4,27 6,06 5,00 3,72 3). Wood & Forest Products -1,38 -3,47 0,35 -3,14 6,18 7,67 5,17 4). Paper and Moulded products 6,34 1,67 1,40 -4,75 4,45 0,64 0,31 5). Fertilizers, Chemical & Rubber Products 1,64 4,70 3,95 10,50 2,21 11,41 -0,07 6). Cement & Non-metallic mineral products -0,51 2,18 7,19 7,80 3,00 3,34 3,93 7). Basic Ferrous Metal & Steel -4,26 2,38 13,06 5,86 6,93 13,14 0,30 8). Vehicles, Machinery & Tools -2,87 10,38 6,81 7,03 10,54 10,51 6,03 9). Other products 3,19 3,00 1,82 -1,13 -0,70 -11,00 18,35

    Manufacturing Industry 2,56 5,12 6,74 6,42 6,10 6,69 5,56 Gross Domestic Product (GDP) 4,63 6,22 6,49 6,26 5,78 6,02 5,21

    MANUFACTURING INDUSTRY GROWTH BY SECTORS

    Source: BPS, processed by MoI 2014

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    19,43

    25,61

    38,53

    49,89 51,17

    0

    10

    20

    30

    40

    50

    60

    2009 2010 2011 2012 2013

    DOMEST IC    INVESTMENT  ( IDR    TR IL LION )

    3,83 3,36

    6,79

    11,77

    15,86

    0

    2

    4

    6

    8

    10

    12

    14

    16

    18

    2009 2010 2011 2012 2013

    FOREIGN    INVESTMENT(USD  BIL L ION )

    In 2013, domestic investment increase 2,57% while foreign investment increase 34,74%.

    INVESTMENT FIGURES

    Source: BPS, processed by MoI 2014

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    73,43

    98,01

    122,18116,12 113,03

    72,39

    101,11

    126,09139,73 131,4

    1,04

    -‐3,1 -‐3,91-‐23,61 -‐18,37

    -‐40

    -‐20

    0

    20

    40

    60

    80

    100

    120

    140

    160

    2009 2010 2011 2012 2013

    Export Import Balance

    MANUFACTURING INDUSTRY TRADE BALANCE

    In billion USD

    Source: BPS, processed by MoI 2014

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    Global Competitiv

    eness

    World Economic

    Forum (The

    Global Competitiveness Report, 2013-20

    14)

    5

    Logistic

    World Bank (The

    Logistics Performance Index and Its

    Indicators (2012)

    6

    Tax

    ASEAN Tax

    Guide, KPMG (2013)

    8

    Productivity

    APO

    Productivity

    Database (2013)

    5

    Electrici

    ty

    The 23rd Survey of Investment Related

    Costs in Asia

    and Oceania,

    Jetro (2013)

    2

    Interest

    Rate

    Trading Economics (2014)

    9

    Investmen

    t Rating

    Trading Economics (2014)

    5

    Legal Minimum

    Wage

    The 23rd Survey of Investment Related Costs in Asia and Oceania,

    Jetro (2013)

    7

    Ease of doing

    business

    Doing Business (2014)

    7 Rank Rank Rank Rank Rank Rank Rank Rank Rank

    INDONESIA IN ASEAN

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    IMPORT OF PETROCHEMICAL PRODUCT

    0  

    200  

    400  

    600  

    800  

    1,000  

    1,200  

    Methanol   Ammonia   Ethylene   Propylene   Polyethylene   Polypropylene  

    Value  (US$  M

    illions)  

    Petrochemical  Products  

    2010   2011   2012   2013  (s.d.  Agustus)  

    Source: BPS, processed by MoI 2014

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    IMPORT OF CHEMICAL PRODUCTS ABOVE US$ 100 MILLIONS

    No HS Code Description 2012 1 3104.20.00.00 Potassium chloride 1,240,580,000 2 2902.43.00.00 P-xylene 959,504,634 3 2901.21.00.00 Ethylene 879,736,575 4 3902.10.90.20 Polypropylene in granule form 783,504,624 5 2905.31.00.00 Ethylene glycol (ethanediol) 457,241,093 6 3901.10.99.10 Low Density Polyethylene (LDPE) 455,414,871 7 3902.30.90.10 Propylene copolymers in granule 400,202,444 8 4002.19.90.00 Styrene-butadiene, butadiene rubber 377,091,344 9 2901.22.00.00 Propene (propylene) 375,869,312

    10 3901.20.00.00 High Density Polyethylene (HDPE) 368,506,858 11 2809.20.99.00 Phosphoric acids, hypophoric acids 294,193,934 12 2902.20.00.00 Benzene 252,520,360 13 3901.90.90.00 Oth polymers of ethylene in oth form 195,604,290 14 3906.90.99.00 Oth sodium polyacrylate 192,198,520 15 3903.30.90.00 Acrylonitrile-butadiene-styrene copolymers 165,270,873 16 3907.60.90.00 Polyethylene terephthalate (PET) 161,971,233 17 2902.30.00.00 Toluene 148,778,946 18 2803.00.40.10 Rubber grade of other carbon black 147,832,536 19 2903.21.00.00 Vinyl chloride (chloroethylene) 114,076,959 20 2901.24.00.00 Buta-1, 3-diene and isoprene 113,907,638 21 3909.50.00.00 Polyurethanes 109,271,537 22 2501.00.90.10 Salt (NaCl >94,7%) 106,999,336 23 2905.11.00.00 Methanol (methyl alcohol) 103,477,092 24 3907.99.90.00 Oth polyesters saturated in oth form 103,247,425 25 3907.40.00.90 Other polycarbonates 102,937,959

    TOTAL 8,609,940,393

    Source: BPS, processed by MoI 2014

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    Additional Gas Demand For New Fertilizer Industry

    Plant Capacity (Tons) Gas Demand

    (mmscfd)

    Kaltim-5 1,155,000 80

    Pusri IIB 907,500 62

    Pusri IIIB 907,500 86

    Ammonia Urea II PT. PKG

    570,000 85

    Kujang IC 907,500 86

    Total 4,447,500 399

    GAS DEMAND FOR INDUSTRY AS RAW MATERIAL

    Source: National Gas Balance 2013-2030

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    No. Industry 2013 2014 2020 2030

    1 Raw Material 1,068 1,068 1,736 1,739

    2 Energy Sources 1,091 1,133 1,257 1,279

    a. Direct contact with product 485 485 513 514

    b. Utilities 606 648 744 765

    Total 2,159 2,201 2,993 3,018

    in mmscfd

    GAS DEMAND FOR INDUSTRY

    Source: National Gas Balance 2013-2030

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    0 100 200 300 400 500 600 700 800

    Pupuk Petrokimia

    Keramik Kaca

    Glassware Semen Logam

    Makanan dan Logam Tekstil

    Petrokimia Kertas

    Lain-lain

    797.00 295.00

    123.88 81.19

    25.30 8.00

    80.00 63.66

    153.59

    35.57 168.54

    270.32

    129.90

    GAS DEMAND FOR INDUSTRY 2013

    Others Paper

    Petrochemical Textiles

    Metal Food & Beverages

    Metal Cement

    Glassware Glass

    Ceramic Petrohemical

    Fertilizers

    Raw Material Energy (Direct Contact) Energy (Utilities)

    Source: National Gas Balance 2013-2030

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    NO REGION 2013 2014 2020 2030 1 ACEH 130 130 130 130

    2 NORTH SUMATERA 44 45 49 49

    3 SOUTH AND CENTRAL SUMATERA 257 257 278 283

    4 WEST JAVA 835 839 919 934

    5 CENTRAL 21 21 22 22

    6 EAST JAVA 236 254 394 396

    7 EAST KALIMANTAN 505 523 523 526

    8 EAST SULAWESI 0 0 0 0

    9 CENTRAL SULAWESI 70 70 70 70

    10 PAPUA 0 0 535 535

    11 RIAU 61 61 72 72

    12 SOUTH MALUKU 0 0 0 0

    Total 2,159 2,201 2,993 3,018

    GAS DEMAND PER REGION (MMSCFD)

    Source: National Gas Balance 2013-2030

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    GAS DEMAND PER SECTOR (MMSCFD) NO. INDUSTRY 2013 2014 2015 2020 2025 2030

    RAW MATERIAL 1.068,22 1.068,22 1.086,22 1.736,22 1.739,32 1.739,32 1 Fertilizers 773,22 773,22 791,22 1.028,22 1.028,22 1.028,22 2 Petrochemicals 295,00 295,00 295,00 708,00 711,10 711,10

    ENERGY 1.090,90 1.132,54 1.194,71 1.257,01 1.278,13 1.278,83 a. Direct contact 335,88 336,03 337,18 379,17 379,41 379,41

    1 Ceramics 133,70 133,82 133,95 134,68 134,68 134,68 2 Glass 81,19 81,19 81,19 81,19 81,19 81,19 3 Glassware 28,36 28,38 28,38 28,60 28,83 28,83 4 Cements 8,00 8,00 9,00 10,00 10,00 10,00 5 Metals 80,00 80,00 80,00 120,00 120,00 120,00 6 Rubber gloves 4,63 4,65 4,67 4,70 4,70 4,70

    b. Utilities 755,02 796,51 857,53 877,84 898,72 899,42 1 Foods & Beverages 54,17 57,72 62,96 68,25 75,11 75,81 2 Metals 148,79 148,88 148,98 134,34 134,63 134,63 3 Textiles 35,89 36,01 36,16 36,98 37,89 37,89 4 Petrochemicals 125,46 157,96 169,96 170,86 170,86 170,86 5 Papers 270,32 270,32 301,92 307,92 319,92 319,92 6 Tires 51,57 51,57 53,30 55,45 55,45 55,45 7 Vehicles 4,50 4,89 4,89 4,89 4,89 4,89 8 Vehicle spare parts 7,57 7,75 7,59 8,26 8,99 8,99 9 Carbides 2,30 2,30 2,47 3,07 3,07 3,07

    10 MSG 8,27 8,27 8,27 13,27 13,27 13,27 11 Cocoa 0,57 0,59 0,62 0,68 0,68 0,68 12 CPO dan derivatives 28,32 29,82 39,07 39,07 39,07 39,07 13 Animal feed 2,94 4,03 4,34 5,17 5,17 5,17 14 Basic inorganic chemicals 2,23 2,25 2,34 7,44 7,54 7,54 15 Sorbitol 0,11 0,11 0,11 5,11 5,11 5,11 16 Industrial gas 2,88 2,88 2,88 2,88 2,88 2,88 17 Electronics 6,32 8,35 8,86 11,39 11,39 11,39 18 Other downstream chemicals 2,81 2,81 2,81 2,81 2,81 2,81

    TOTAL 2.159,12 2.200,76 2.280,93 2.993,23 3.017,45 3.018,15

    Source: National Gas Balance 2013-2030

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    NATURAL GAS UTILIZATION

    Source: Indonesia Energy Outlook 2013, BPPT

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    1.  There are still export oriented mindset of natural resources and energy such as oil and gas.

    2.  The upstream chemical industry are not integrated yet with its downstream industry as well as the oil and gas industry.

    3.  The flood of importation petrochemical products coming from ASEAN, China and the Middle East, with the competitive price and the same quality.

    4.  Inadequate infrastructure support, for example ports, access roads, power plants, limited of pipelines, and others.

    5.  Inadequate of R & D of petrochemical industry both product and process technology.

    6.  Some business climate policy need to be adjusted in order to create attractive investment condition.

    CHALLENGES

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    1.  Develop petrochemical industry by implementing cluster system and Master Plan of Acceleration and Expansion of Indonesian Economy (MP3EI) 2011-2025 through 6 National Economy Corridor.

    2.  Support petrochemical cluster development across the nation. •  Sumatera: Lhoksoumawe (PT PIM), Plaju-Musi (PT Pusri and PT Pertamina), •  Java: Banten (PT Chandra Asri Petrochemical), Tuban-Gresik (PT TPPI dan PT

    Petrokimia Gresik), Balongan (PT Pertamina and PT Polytama Propindo), Cepu (Pertamina), Cilacap (PT Pertamina).

    •  Kalimantan dan Sulawesi: Bontang (PT Pupuk Kaltim), Donggi Senoro (potential gas reserves).

    •  Papua: Teluk Bintuni (potential gas reserves).

    STRATEGIC POLICIES

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    3.  Improving industry competitiveness through creating value added of various raw material (multiple feedstock/ horizontal differentiation) : •  Condensate production: 36 million barrels/year •  Natural Gas Reserves: 153 TSCF •  Coal Bed Methane (CBM) Reserves : 453 TSCF •  Shale Gas Reserves : 574 TSCF •  Coal Reserves : 21 billion tons

    4.  Controlling export of raw material by implementing Domestic Market Obligation for a certain commodity (such as naphtha, condensate, LPG, coal, CPO)

    5.  Maintaining condusive investment and business climate, through: a.  Tax allowance (PP No. 52/2011). b.  Tax holiday (PMK No. 130/2011). e.  Providing import duties and taxes exemption for raw material and capital goods. f.  Government Borne Duties (BMDTP) for raw and supporting material that is not yet

    produced domestically. e.  Government Borne Taxes (PPNDTP) for waste treatment facilities. f.  Harmonizing upstream to downstream import duties.

    STRATEGIC POLICIES (CONT’D)

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    6.  Develop infrastructure through coordination with other line government institution.

    7.  Improving industrial competitiveness by encouraging the utilization of local content in engineering, procurement and construction (EPC) service, plant maintenance service, etc.

    8.  Promoting development of methane-based petrochemical (C1). 9.  R&D in gasification technology to produce alternative resources substituting

    oil and gas. 10.  Implementating efficient and clean technology.

    STRATEGIC POLICIES (CONT’D)

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    MASTER PLAN OF ACCELERATION AND EXPANSION OF INDONESIAN ECONOMY

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    CENTERS FOR DEVELOPMENT OF PETROCHEMICAL INDUSTRY

    NO. LOCATION GROUP PRODUCT

    1. Cilegon, Banten Olefins Ethylene, Propylene, PP, PE

    2. Bontang, East Kalimantan

    Methane Methanol, Ammonia, Urea

    3. Tuban, Gresik, East Java

    Aromatics C1

    Benzene, Toluene, P-xylene, Ammonia, Urea

    4. Muara Enim, South Sumatera

    Coal-bed-methane

    Ammonia, Urea

    5. Teluk Bintuni, West Papua

    Methane Methanol, Ammonia, Urea, Polyethylene, Polypropylene

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    BANTEN,  WEST  JAVA  

    EAST  KALIMANTAN  

    WEST  PAPUA  

    EAST  JAVA  

    SOUTH  SUMATERA  

    CENTERS FOR DEVELOPMENT OF PETROCHEMICAL INDUSTRY

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    METHANE BASED PETROCHEMICAL COMPLEX IN TELUK BINTUNI, WEST PAPUA

    Phase I

    Phase II

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    CLOSING REMARK

    1.  As stated into Law No. 3 / 2014 regarding Industry, Government of Indonesia have to secure the availibility of energy and raw material supply.

    2.  Industrial sector by 2030 projected to consume gas as raw material and energy sources, approximately 3.018 mmscfd.

    3.  Pricing policy set by Government is a key point for industrial sectors to strengthen its competitiveness in confronting ASEAN Economic Community 2015 and other international market.

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