Lotte Chemical prioritises supply for domestic downstream industries
Jakarta (ANTARA) - Domestic petrochemical company Lotte Chemical Indonesia (LCI) has reaffirmed its commitment to prioritising supply availability for the domestic downstream industry amid global supply chain pressures due to escalating geopolitical tensions in the Middle East region.
In an official statement in Jakarta on Thursday, LCI Management Support Director Cho Jin-Woo stated that disruptions in the strategic Strait of Hormuz route have significantly impacted the availability of key raw materials, such as naphtha and LPG, which support the national petrochemical industry.
In facing this situation, LCI is taking proactive steps by seeking alternative sources to secure raw material supplies, while ensuring the continuity of production and fulfilment of domestic customer needs.
Cho Jin-Woo emphasised that the company prioritises production allocation for the domestic market as part of efforts to maintain the stability of the national downstream industry.
“In this uncertain situation, our top priority is to maintain supply continuity for the domestic industry. LCI continues to optimise all available resources to minimise the impact of disruptions on customers, while supporting the stability of the national manufacturing sector,” said Cho.
In line with this, the company is also making operational adjustments, including reducing production levels due to changes in raw material procurement routes affected by logistical barriers.
“LCI is still operating to date but with reduced production levels, due to changes in raw material procurement routes caused by existing logistical obstacles. We evaluate daily to ensure a transparent update on the current situation as conditions evolve,” Cho continued.
To address the ongoing pressures, LCI is also seeking strategic support from the government. Some proposed measures include simplifying raw material import regulations, implementing zero per cent import duties for LPG, and temporary fiscal assistance to dampen cost spikes due to the global supply chain crisis.
Additionally, the company hopes for support in opening safe routes for raw material transport ships that are currently held up in the Strait of Hormuz area.
Cho assessed that such support is important not only for maintaining current operations but also for strengthening domestic industry resilience in the future.
“We hope the government can help ensure energy availability and targeted policy support so that our production activities can continue and provide positive impacts for the government’s planned downstreaming programme,” he added.
Previously, Industry Minister Agus Gumiwang Kartasasmita emphasised that the government is continuously working on diversifying raw materials and promoting recycling utilisation to maintain national plastic availability amid global geopolitical pressures.
Responding to the dynamics of plastic raw material prices and supplies, Agus, in a confirmed statement in Jakarta on Wednesday (8/4), explained that the escalation of conflict in the Middle East region has affected the global petrochemical industry supply chain, particularly for naphtha commodities which are the main raw material for plastics.