Dongsuh Chemical Expands Aluminium Materials Business in Indonesia

Dongsuh Chemical is expanding its business in Indonesia with a new production facility in Cilegon, Banten, an industrial hub west of Jakarta. The plant is Indonesia’s first facility dedicated to producing Coal Tar Pitch, or CTP Binder, a key material used in the aluminium smelting industry.

The facility is located within the Krakatau Posco industrial complex in Samangraya, Citangkil, Cilegon. The location gives Dongsuh Chemical access to one of Indonesia’s most integrated industrial areas, with established manufacturing, logistics, port and heavy-industry infrastructure.

Dongsuh Chemical Cilegon has an annual production capacity of 50,000 tonnes of CTP Pitch Binder and 38,000 tonnes of Creosote Oil. The scale gives the company a new platform for building its industrial chemicals business in Indonesia while serving aluminium producers that require reliable supplies of critical raw materials.

CTP Binder is an important material used to manufacture carbon anodes, which are essential to the aluminium smelting process. The product therefore sits at an important point in the aluminium supply chain, where material quality and supply reliability can directly affect downstream production.

Dongsuh Chemical’s operation in Cilegon is also connected to the production facilities of PT Krakatau Poschem Dongsuh Chemical, or KPDC. KPDC produces soft pitch, which can then be processed by Dongsuh Chemical into CTP Binder.

This structure gives Dongsuh Chemical a relatively integrated production chain within the Cilegon industrial area. Raw materials can be processed into higher-value industrial materials before being supplied to the aluminium industry, creating a business ecosystem that links chemical materials with metal manufacturing.

For Dongsuh Chemical, the new facility expands its role from a material supplier into a more strategic part of the aluminium supply chain. The strategy becomes increasingly relevant as demand for aluminium grows across the automotive, construction, packaging, electronics and manufacturing industries.

Dongsuh Chemical Group Chairman Jang Yeol Jeon has positioned the Cilegon facility as part of the company’s effort to build a supply chain for key materials supporting the growth of Indonesia’s aluminium industry. The company also sees opportunities to develop additional industrial materials from its new production base.

The investment highlights the expansion of South Korean companies into Indonesia’s industrial materials sector. Dongsuh Chemical selected Cilegon as its production base partly because the area already has a mature ecosystem covering heavy industry, chemicals, metals and manufacturing.

The new facility also gives Dongsuh Chemical an opportunity to reduce its reliance on cross-border supply chains. Local CTP Binder production allows the company to operate closer to industrial customers while potentially shortening delivery times for materials required in aluminium production.

From a business perspective, the 50,000-tonne annual CTP Binder capacity gives Dongsuh Chemical room to build a larger domestic customer base. The company could also expand into regional markets as production capacity and distribution networks develop.

Dongsuh Chemical is looking beyond CTP Binder. The company sees its technology and production facilities as a foundation for developing higher-value materials, including biocoke and materials associated with the battery industry.

That direction could broaden Dongsuh Chemical’s portfolio from aluminium-related materials into a wider range of advanced industrial materials. New product development would allow the company to leverage its production infrastructure, technology and industrial network in Indonesia.

The potential move into battery-related materials is particularly relevant as Indonesia develops its electric vehicle and battery supply chains. For Dongsuh Chemical, establishing a production presence in Indonesia provides an opportunity to participate in that growth as a materials supplier.

Dongsuh Chemical is also conducting social initiatives through the Sangik Foundation. During the Cilegon facility inauguration, the company awarded scholarships to 100 students, continuing an education programme that began in 2016.

With annual capacity of 50,000 tonnes of CTP Binder and 38,000 tonnes of Creosote Oil, the new Cilegon facility gives Dongsuh Chemical a significant production base in Indonesia. Located west of Jakarta, the plant provides the South Korean company with a platform to expand its aluminium materials business while opening opportunities in higher-value industrial materials.