The government through state-owned oil and gas company PT Pertamina has completed the conversion of receivables into shares in TPPI, Coordinating Minister for Economic Affairs Airlangga Hartarto said in Jakarta on Friday.
By holding a 80 percent stake in TPPI, the government can push petrochemical production and reduce imports, he said.
"As such, we will be able to reduce the import of chemicals. (The agreement) was signed today and the president will inspect TPPI's plant tomorrow. That is the government's quick win program," he said.
Related news: Indonesia offers Korea's SK Group to invest in petrochemical industry
TPPI is a subsidiary of PT Tuban Petrochemical Industries (TPI).
Hartarto said the import of chemicals can be further kept down if the government's debottlenecking program can be realized in the medium and long terms.
Furthermore, the amount of foreign exchange saved can also increase if the price of aromatic (petrochemical derivatives) production rises, he said.
"Since the price may fluctuate, there must be additional investment in the future not only in aromatic production but others as well . And the Industry Ministry will make preparations for that effect," he said.
The government officially holds a 95.9 percent stake in PT TPI. which now comes under financial pressure. The stake rose compared to 70 percent previously. In the middle of this year the government provided state capital worth Rp2.62 trillion or equivalent to 157,906 shares, bringing its stake in the company to 95.9 percent.
Related news: Indonesia to boost petrochemical development in Bintuni, W Papua