Danantara Indonesia's Major Investment Push Drives Industrial Downstreaming
Danantara Indonesia has reaffirmed its commitment to strengthening national strategic industries through a substantial investment realised in collaboration with the Indonesia Investment Authority (INA) and the Chandra Asri Group. The collaboration was marked by the signing of a Conditional Share Subscription Agreement (CSSA) to bolster domestic production capacity for Caustic Soda and Ethylene Dichloride (EDC), and to enhance domestic supply resilience.
The agreement marks a phase of capital commitment to support the development of a Chlor Alkali - Ethylene Dichloride (CA-EDC) plant in Cilegon, Banten, developed and operated by PT Chandra Asri Alkali (CAA), a subsidiary of the Chandra Asri Group. The project aims to reduce dependence on imports of crucial raw materials across various industries, while driving the downstream agenda as part of a long-term economic transformation. The presence of domestic Caustic Soda production capacity is expected to significantly strengthen import substitution and domestic supply resilience. Meanwhile, EDC production will not only support domestic industries but also has potential to boost exports, contributing to foreign exchange earnings, as the competitiveness of the national chemical industry strengthens.
The CA-EDC plant’s project value is USD 800 million, and it is part of the National Strategic Project (PSN) focused on producing essential feedstocks for upstream and downstream industries. Caustic Soda is used as a raw material in soap and detergent production, alumina refining, and paper-making; EDC is a key feedstock supporting construction and packaging industries.
Under the agreed investment structure, Danantara Indonesia and INA will jointly invest a total of USD 200 million. This funding will be used to construct the CA-EDC industrial facility managed by PT Chandra Asri Alkali (CAA), a subsidiary of the Chandra Asri Group, with operation planned to commence in 2027.
Pandu Sjahrir, Chief Investment Officer of Danantara Indonesia, said the agreement demonstrates Danantara Indonesia’s real commitment to strengthening the national strategic industries, adding value, creating jobs, and accelerating Indonesia’s economic growth. “This collaboration is not only a response to import dependency challenges but also a concrete step to speed up downstreaming, a key driver of Indonesia’s economy,” he said, quoted from Danantara’s press release, on Wednesday 4 March.
Eddy Porwanto, Acting Chairman of INA’s Board of Directors, stressed that the investment reflects INA’s long-term mandate to mobilise capital for priority national sectors. “Together with Chandra Asri Group as the country’s largest fully integrated petrochemical player and a leading firm in Southeast Asia, and Danantara Indonesia as a long-term investment partner, the collaboration aims to build a robust funding base to support the sustainable development of capacity in strategic feedstock industries. This effort is expected to drive downstreaming, increase domestic value-added, and strengthen competitiveness and resilience of the national industry,” he added.
Erwin Ciputra, President Director and CEO of Chandra Asri Group, welcomed the involvement of Danantara Indonesia and INA as strategic investment partners in the CA-EDC project. “This support reflects confidence in Chandra Asri Group’s ability to develop this facility. We hope the CA-EDC project can significantly reduce dependence on imports of strategic chemicals, strengthen the resilience of the national supply chain, and support downstreaming. Moreover, the construction and operation of the facility will create around 3,000 jobs during the construction phase and 250 in operation, as well as delivering a lasting positive impact for the community and industry in Cilegon and surrounding areas,” he said.
The collaboration among Danantara Indonesia, INA, and Chandra Asri Group demonstrates a synergy between the state investment manager and a leading petrochemical company. By fortifying the domestic supply chain while opening broader export opportunities, the partnership contributes to accelerating sustainable industrialisation and strengthening Indonesia’s competitiveness in the global market.