Indonesia has begun construction of its first domestic melamine plant in the Gresik Special Economic Zone (KEK Gresik), East Java, in a move aimed at accelerating downstream development in the national chemical industry. The project, developed by PT GEABH Joint Technology, is targeted to commence operations in the second quarter of next year. Coordinating Economic Affairs Minister Airlangga Hartarto said the development reflects the government’s commitment to strengthening value-added industries, particularly in strategic sectors such as petrochemicals.
“This project is part of a broader development plan in KEK Gresik, with a projected investment of around US$600 million (IDR 10.2 trillion),” he said on Wednesday.
The facility is designed as an integrated melamine production chain with an annual capacity of up to 120,000 tonnes. In its initial phase, the plant will include production capacities of 800 tonnes per day (TPD) of ammonia, 1,500 TPD of urea, and 200 TPD of melamine.
The complex will process natural gas into ammonia, which will then be converted into urea and further developed into higher-value derivative products such as ammonium nitrate and melamine, a chemical compound mainly used to produce hard and durable plastics. These products are widely used in agriculture, chemicals, and manufacturing, and are expected to support domestic industries while opening export opportunities.
The project aligns with the government’s 2025–2029 National Medium-Term Development Plan (RPJMN), which prioritizes industrial downstreaming and the strengthening of special economic zones as key drivers of growth. KEK Gresik has been designated as one of the country’s priority zones, playing a strategic role in boosting industrialization, exports, and regional economic development.
As of 2025, cumulative investment in special economic zones reached IDR 336 trillion, with more than 249,000 jobs created. KEK Gresik alone accounted for IDR 105.4 trillion, or roughly 31 percent of total KEK investment, employing around 46,000 workers. Airlangga noted that the manufacturing sector contributed 19.07 percent to Indonesia’s gross domestic product in 2025, underscoring its role as a key growth engine across industrial zones. At the regional level, manufacturing in East Java contributes about 31.32 percent to the regional economy, while the unemployment rate in Gresik regency has declined from 8 percent to 5.47 percent over the past five years.
“East Java is one of Indonesia’s main manufacturing hubs, contributing nearly a quarter of national manufacturing output. It is therefore crucial to maintain this competitive momentum,” said East Java Deputy Governor Emil Elestianto Dardak.
Beyond import substitution for key chemical feedstocks, the melamine project is expected to strengthen domestic supply chains, enhance export competitiveness, and create new employment opportunities. The development of KEK Gresik has been supported by government-backed infrastructure and policy incentives aimed at fostering industrial expansion in the zone. Government data also point to broader socioeconomic gains, including improvements in the Human Development Index (HDI), which rose from 76.98 in 2021 to 79.69 in 2025.
April 9, 2026, The Jakarta Post
(https://www.thejakartapost.com/business/2026/04/09/ri-breaks-ground-on-first-melamine-plant-with-600m-investment-plan.html)