Indonesian petrochemical producers face cheaper Chinese imports
Domestic producers meet about 60% of Indonesia’s petrochemical needs, while imports supply the remaining 40%, according to Chandra Asri.
Cheaper petrochemical imports from China are putting pressure on Indonesian manufacturers, Chandra Asri Group executive Suryandi said during a Forum Wartawan Industri (Forwin) discussion on 2 November 2026.
Suryandi, the group’s director of human resources and corporate affairs, attributed Chinese producers’ lower costs to government support, subsidies and access to cheaper raw materials. He said their use of ethane technology also reduced reliance on naphtha when producing ethylene for polyethylene.
Indonesia’s petrochemical industry, meanwhile, relies on overseas supplies for most of its naphtha requirements. That dependence leaves production costs and competitiveness exposed to geopolitical disruptions.
Suryandi said local producers could supply only about 60% of domestic petrochemical demand, with imports accounting for 40%. Chandra Asri estimated that demand could grow by 5%-6% annually, potentially outpacing economic growth.
To compete, Chandra Asri identified reliable plant operations, tighter cost management and products with more specialised specifications as priorities. Suryandi also highlighted the burden of costs outside production, including bank borrowing.
The company said it was working to strengthen customer relationships to keep locally made products in demand. It also called for a stronger downstream industry and more competitive domestic products to prevent import dependence from increasing.
