Reduce Imports, Danantara and INA Sign Investment Agreement for CA-EDC Project
Jakarta – Danantara Indonesia, Indonesia Investment Authority (INA) and Chandra Asri Group officially signed a Conditional Share Subscription Agreement (CSSA) to strengthen domestic production capacity of Caustic Soda and Ethylene Dichloride (EDC) and to increase domestic supply resilience.
This follows a Memorandum of Understanding (MoU) signed previously by Danantara Indonesia, INA and PT Chandra Asri Pacific Tbk (Chandra Asri Group), with Danantara Indonesia and INA as strategic investors in the project.
The agreement marks the phase of capital commitment to support the Chlor Alkali – Ethylene Dichloride (CA-EDC) plant in Cilegon, Banten, developed and operated by the Chandra Asri Group. The project aims to reduce import dependence for crucial feedstocks in various industries, while advancing the downstreamisation agenda as part of long-term economic transformation.
The presence of domestic Caustic Soda production capacity is expected to significantly strengthen import substitution and domestic supply resilience. While EDC production will not only meet domestic industry needs but also has potential to increase exports, contributing to foreign exchange earnings and strengthening the competitiveness of the national chemical industry.
The CA-EDC plant has a project value of USD 800 million, and is part of the National Strategic Project (PSN) focusing on production of essential raw materials for upstream and downstream industries. Caustic Soda is used as a feedstock in the production of soap and detergents, alumina refining, and paper production processes. EDC is a primary feedstock that drives the construction and packaging industries.
Under the agreed investment structure, Danantara Indonesia and INA will jointly invest a total of USD 200 million. The funding will be used to build a strategically industrial facility CA-EDC managed by PT Chandra Asri Alkali (CAA), a subsidiary of Chandra Asri Group, and is planned to commence operations in 2027.
Pandu Sjahrir, Chief Investment Officer of Danantara Indonesia, said the agreement underscores Danantara Indonesia’s commitment to strengthening national strategic industries that add high value, create jobs and accelerate Indonesia’s economic growth. “This collaboration is not only a response to import dependency challenges but also a concrete step to accelerate downstreamisation, a key driver of Indonesia’s economy,” he said.
Eddy Porwanto, Acting Chair of the INA Board of Directors, stated, “This investment reflects INA’s long-term investment mandate to mobilise capital in sectors of national priority. Together with Chandra Asri Group as the largest integrated petrochemical player in Indonesia and a leading one in Southeast Asia, and Danantara Indonesia as a long-term investor partner, the collaboration aims to build a robust funding foundation to support the sustainable development of strategic feedstock capacity. This effort is expected to boost downstream development, increase domestic value-add, and strengthen the competitiveness and resilience of the national industry.”
Chandra Asri Group President Director and CEO Erwin Ciputra welcomed Danantara Indonesia and INA as strategic investment partners in the CA-EDC project. The support reflects confidence in Chandra Asri Group’s ability to develop this facility.
“We hope the CA-EDC project will significantly reduce dependence on imports of strategic chemicals, strengthen the national supply chain resilience, and support downstreamisation. In addition, the construction and operation of the facility will create up to 3,000 jobs during construction and 250 during operation, with lasting benefits for the community and industry in Cilegon and surrounding areas,” he said.
In the first phase, the CA-EDC plant will have an annual production capacity of 400,000 tonnes of dry Caustic Soda per year and 500,000 tonnes of Ethylene Dichloride. The facility will be developed with high technology and safety standards to ensure operational efficiency, supply reliability and adherence to sustainability principles.
The collaboration between Danantara Indonesia, INA and Chandra Asri Group represents a synergy between state investment management and a leading petrochemical company. By strengthening the domestic supply chain while opening broader export opportunities, this partnership contributes to accelerating sustainable industrialisation and strengthening Indonesia’s competitiveness in the global market.