Remarks of President of the Republic of Indonesia at Groundbreaking of Coal Downstream Project into Dimethyl Ether (DME) in Muara Enim Regency, South Sumatra Province, January 24, 2022

Bismillahirrahmanirrahim.

Assalamu’alaikum warahmatullahi wabarakatuh,
Good afternoon,
May prosperity be upon us all,

Distinguished Ministers of the Indonesian Onward Cabinet in attendance, Cabinet Secretary, Minister of State-owned Enterprises (SOEs), Minister of Investment, and Minister of Energy and Mineral Resources;
Distinguished Head of the Board of Commissioners of the Financial Services Authority (OJK) Wimboh Santoso, Head of the Financial and Development Supervisory Agency (BPKP);
Distinguished Governor of South Sumatra and Regent of Muara Enim;
Honorable President and CEO of Air Products and Chemicals Seifi Ghasemi who attends the event virtually;
Honorable CEOs and President Directors of PT Bukit Asam, PT Pertamina, and PT Mining Industry Indonesia (MIND ID);

Ladies and Gentlemen, Esteemed Guests.

I have conveyed many times about downstreaming, industrialization, and the importance of reducing imports. It has been six years since I made the order. Even though it takes long-term processing, alhamdulillah, we can start the groundbreaking for downstreaming of coal project into dimethyl ether (DME).

Our current value of liquefied petroleum gas (LPG) imports reached around Rp80 trillion out of Rp100 trillion total demands per year. We also have to provide subsidy so that the communities can use the LPG since the price is way too high. The subsidy reached Rp60-70 trillion. My question is, do we want to keep doing this? Keep importing? We just help other countries make profits, create more job opportunities, even though we have the raw materials, namely coal which is converted into DME.

It [DME] is almost similar to LPG. I have seen the fire produced from DME and LPG that are used for cooking. Both are the same. If this project between state-owned coal miner PT Bukit Asam (PTBA), state-owned energy company PT Pertamina, and United States-based chemical firm Air Products and Chemicals, has begun production, it will reduce subsidies from the State Budget by around Rp7 trillion. If the use of LPG can be stopped and all move to DME, we can reduce the subsidy spending from the huge amount of Rp60-70 trillion sourced from the State Budget. This is what we continue to pursue. Besides improving the trade balance, we can also improve the current account balance as we stop importing.

However, it has been six months since I made the order. We have been comfortable with imports for decades. Some are comfortable with imports. Indeed, it is comfortable to sit in the comfort zone, keep repeating the import routine without even thinking that it brings disadvantages for the country and the people because there are no job opportunities.

Imagine that what Minister of Investment has conveyed will create employment for around 12-13 thousand people. If there are five investments like the one in front of us, it means 70 thousand jobs will be created. That is for direct investment, while indirect investment can create two or three folds as much. This is why I continue to follow. I continue to pursue.

Earlier before I arrive here, I have gathered everything related to this matter in order to ensure that it will be completed within 30 months, as conveyed by Air Products and Minister of Investment. Do not miss the target by too far.

We hope after we finish the project here, we will start again elsewhere since this project can only cover South Sumatra and its surrounding areas, approximately six million families. We have abundant coal deposits; it is far too small when it comes to DME production.

And by saying bismillahirrahmanirrahim, this morning I hereby declare the Groundbreaking of Coal Downstream Project into Dimethyl Ether begin.

I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.

(RIF/MUR)