TEMPO.CO, Jakarta - South-Korean-based petrochemical company PT Lotte Chemical Indonesia (LCI) is grappling with pressure on its raw material supply as global logistics chains buckle under the escalating conflict in the Middle East. Cho Jin-Woo, LCI’s Director of Management Support, stated that the rising tensions in the Strait of Hormuz are directly impacting the availability of naphtha and LPG, the two primary pillars of the petrochemical industry.
Cho mentioned that the company is currently rerouting its raw material supply chains through alternative paths to maintain production continuity. Despite these constraints, LCI continues to prioritize its product distribution to meet domestic market needs.
"Our priority is to maintain the supply for the domestic industry. We are optimizing all resources to minimize the impact of these disruptions on our customers," Cho said, as quoted in a press release on Thursday, April 9, 2026.
Due to these pressures, he noted that the company has been forced to scale back production levels as the change in procurement routes has created logistical barriers. Operational evaluations are now being conducted daily to adapt to the rapidly evolving situation.
To navigate these challenges, Lotte Chemical Indonesia is seeking government intervention through several strategic policies, including the simplification of raw material import regulations, the exemption of LPG import duties, and the provision of temporary fiscal incentives to help mitigate rising costs.
Furthermore, the company is also calling for diplomatic support to ensure the safe passage of vessels carrying raw materials currently stalled in the Strait of Hormuz.
Cho emphasized that government action is vital, not only to sustain the company’s operations but also to safeguard the broader national manufacturing sector. He expressed hope that targeted policies can maintain supply stability while simultaneously supporting the national industrial downstreaming agenda.
"We hope the government can assist in ensuring energy availability and provide targeted policy support to guarantee the continuity of our production, which will, in turn, provide positive impacts for the government's downstreaming program," Cho stated.
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