Indonesian State Funds To Invest In Billionaire Prajogo Pangestu-Backed Chandra Asri’s $800 Million Chemical Plant Project

Sovereign wealth funds Danantara Indonesia and Indonesia Investment Authority (INA) are investing in Chandra Asri Pacific’s $800 million chemical plant project outside Jakarta.

To be built in near Chandra Asri’s existing petrochemical plant in Cilegon, about 100 kilometers west of Jakarta, the facility will produce 400,000 tons of caustic soda and 500,000 tons of ethylene dichloride per year when completed in 2027, the company said in a statement on Tuesday. Caustic soda is used in the manufacture of batteries for electric vehicles, while ethylene dichloride is a key ingredient to make PVC pipes.

“Danantara Indonesia and INA’s entry underscores investor confidence in the growth of Indonesia’s chemical industry,” Erwin Ciputra, president director of Chandra Asri Group said in the statement. “Through this collaboration, we are building a solid foundation to drive sustainable industrial development and national economic growth.”

With the new facility, Chandra Asri (controlled by billionaire Prajogo Pangestu) hopes to reduce the country’s dependence on imported chemicals. Once commercial production starts, Indonesia is expected to save up to 4.9 trillion rupiah ($300 million) annually and generate up to 5 trillion rupiah in export earnings each year.

To bankroll the project, Chandra Asri has earmarked a capital expenditure of up to $400 million this year. Details of Danantara and INA’s investments in the project weren’t disclosed.

“This investment strengthens national resilience by reducing import dependence on essential products like caustic soda and ethylene dichloride,” Pandu Sjahrir, chief investment officer of Danantara Indonesia said. “At Danantara Indonesia, we welcome global partners who share our vision of building resilient, high-value industrial ecosystems in Asia’s dynamic economy.”

Chandra Asri has been expanding across Southeast Asia. In April, the company and its partner Glencore completed the acquisition of Shell’s refinery and petrochemical assets in Singapore. Last month, the duo announced the acquisition of Chevron Phillips’ polyethylene manufacturing operations in the city-state.

Jakarta-listed Chandra Asri is part of Barito Pacific, a company originally focused on timber that Pangestu transformed into a major player in energy and petrochemicals. With a real-time net worth of $25.6 billion, Pangestu ranks among Indonesia’s wealthiest individuals. He also holds stakes in publicly traded coal miner Petrindo Jaya Kreasi and Barito Renewables.