Indonesia’s chemical industry is poised for moderate growth in 2025, bolstered by ongoing investment, steady export performance, and targeted government policies. While structural challenges such as import dependency and regulatory complexities persist, the sector’s trajectory reflects a cautious optimism rooted in both domestic production capacity and international demand. 

Upstream production remains central to the country’s chemical competitiveness, with large-scale investments already reshaping Indonesia’s chemical landscape. PT Lotte Chemical Indonesia (LCI) is expected to begin production at its Cilegon plant this year, following an investment of IDR 59.37 trillion (approximately USD 3.6 billion). The facility will strengthen upstream chemical production, providing key feedstocks for domestic and regional markets.  

Similarly, Chandra Asri’s upcoming Chlor Alkali - Ethylene Dichloride (CA-EDC) plant in Cilegon, Banten, exemplifies how strategic investments are enhancing Indonesia’s petrochemical capacity. At 33% completion as of the time of publication, the facility will produce 400,000 tons of caustic soda and 500,000 tons of Ethylene Dichloride annually– providing key raw materials for sectors ranging from water treatment and detergents to alumina and nickel processing–further contributing up to IDR 5 trillion in foreign exchange per year.  

Growth trends in the chemical, pharmaceutical, and textile sectors provide further context for 2025 projections. The Ministry of Industry reports that the combined sector grew 5.8% in 2024 and is forecast to expand 6.5% in 2025, up from 4.3% in 2023. This upward trajectory reflects both domestic market resilience and export-driven demand, particularly in specialty chemical products. Steady growth also reflects Indonesia’s ongoing efforts to align production capabilities with emerging industrial needs and export potential. 

Growth trend for Chemical, Pharmaceutical and Textile (in%) 

Source: Ministry of Industry, 2025 

Trade and Constraints 

At the same time, trade data reflects both the progress and the challenges in the sector. Indonesian chemical exports declined slightly from USD 21.41 billion in 2022 to USD 17.45 billion in 2024, while imports fell from USD 30 billion to USD 26.15 billion over the same period. In the first five months of 2025, exports stood at USD 8.73 billion, with imports at USD 10.99 billion, illustrating that while the industry maintains a trade surplus, dependency on imported inputs remains significant. These figures point to the importance of continued investment in domestic production capacity, particularly for upstream chemicals, to enhance competitiveness and reduce exposure to global market fluctuations. 

Export-Import of Indonesian Chemical Products (in Mn USD) 

Source: Ministry of Industry, 2025 

Government authorities continue to identify opportunities in high-potential chemical segments. Rahayu Ningsih, representing the Ministry of Trade, noted that specialty chemical products accounted for a 17.35% share of total chemical exports in 2024, with a total export value of USD 632.42 million, according to Kontan. Products highlighted as having high potential included perfumes, polyethylene, acrylic polymers, polypropylene, ethylene-alpha-olefin, butadiene rubber, hair care preparations, mixtures of natural rubber, and polymers of ethylene. 

Challenges in the sector include regulatory compliance, including environmental standards and local content requirements, which has historically slowed project implementation and added complexity for investors. Logistics and infrastructure constraints, particularly the uneven distribution of production facilities across Indonesia, also affect efficiency and cost competitiveness. Exporters must navigate global market volatility, changing demand patterns, and competition from established producers in the Asia-Pacific region. 

Nevertheless, opportunities for growth remain, particularly in upstream production and high-value chemical products. Expansion of facilities capable of producing specialty chemicals, polymers, and other industrial intermediates can support both domestic demand and export potential.  

Looking ahead, Indonesia’s chemical industry is expected to achieve moderate growth in 2025, underpinned by large-scale investment, a solid export track record, and policy support for high-potential products. Ensuring consistent upstream production, addressing import dependencies, and maintaining regulatory clarity will be key to sustaining competitiveness. With robust infrastructure projects underway and targeted support for specialty chemicals, the sector is positioned to contribute meaningfully to Indonesia’s economic growth while expanding its role in regional and global markets. 

Challenges in the sector include regulatory compliance, including environmental standards and local content requirements, which has historically slowed project implementation and added complexity for investors. Logistics and infrastructure constraints, particularly the uneven distribution of production facilities across Indonesia, also affect efficiency and cost competitiveness. Exporters must navigate global market volatility, changing demand patterns, and competition from established producers in the Asia-Pacific region. 

Nevertheless, opportunities for growth remain, particularly in upstream production and high-value chemical products. Expansion of facilities capable of producing specialty chemicals, polymers, and other industrial intermediates can support both domestic demand and export potential.  

Looking ahead, Indonesia’s chemical industry is expected to achieve moderate growth in 2025, underpinned by large-scale investment, a solid export track record, and policy support for high-potential products. Ensuring consistent upstream production, addressing import dependencies, and maintaining regulatory clarity will be key to sustaining competitiveness. With robust infrastructure projects underway and targeted support for specialty chemicals, the sector is positioned to contribute meaningfully to Indonesia’s economic growth while expanding its role in regional and global markets.