GOVT DESIGNATES THREE AREAS FOR CHEMICAL INDUSTRY CLUSTERS

Jakarta, Jan 17 (ANTARA) - The government has designated three areas in the provinces of Banten, East Java and East Kalimantan to develop clusters of petrochemical industries.

Banten would be developed into a cluster of olefin industries, East Java a cluster of aromatic industries and East Kalimantan a cluster of gas-based industries, Industry Minister MS Hidayat said in Cilegon, Banten, on Saturday.

"In the future the development of petrochemical industries will be directed towards creating clusters of industries to improve their competitive edge," he said.

The development of industrial clusters was aimed at strengthening the country's industrial structure which would integrate upstream and downstream industries, he said.

To that end, the government was encouraging national businesspeople to take optimum advantage of local resources to meet their industries' demand for raw materials, he said.

"To support the effort the government has drawn up a number of policies, including a regulation on enhancing the use of domestic products," he said.

Hopefully, the policies which gave national industries an easy access to local resources would help improve their performance, he said.

The minister said the national chemical industry, including petrochemical industry had the potentials to develop well because there was still a gap between supply and demand.

In 2007, the national chemical industry had a total production capacity of 37.67 million tons and increased to 38.24 million tons in 2008. The country's exports of chemicals also increased to 5.63 million tons in 2008 from 5.2 million tons in 2007, he said.

Meanwhile, the country's imports of chemicals rose to 3.8 million tons in 2008 from 3.7 millions tons in 2007, he said.

"The domestic consumption of chemical products is expected to increase in the future in line with the economic growth," he said.