Indonesia Boosts Lubricant Manufacturing, Import Substitution

RRI.CO.ID, Jakarta - The Ministry of Industry continues to strengthen Indonesia’s domestic lubricant manufacturing capabilities by expanding its manufacturing base. The effort is reflected in new manufacturing investment aimed at increasing production capacity while creating opportunities to boost value-added production, expand the use of domestic supporting industries, and promote import substitution.

“For the government, this investment is important because it brings new production capacity and manufacturing technology while strengthening linkages with supporting industries in Indonesia. This is the direction of industrialization we seek—investment that strengthens production capacity, value-added activities, technology, and the national industrial ecosystem,” Minister of Industry Agus Gumiwang Kartasasmita, said at the inauguration of the Shell Grease Manufacturing Plant in Marunda, Bekasi, on Tuesday, September 15, 2026.

The strengthening of Indonesia’s manufacturing base is in line with the positive performance of the national non-oil and gas processing industry. In the second quarter of 2026, the sector grew 5.32 percent year-on-year, exceeding national economic growth of 5.29 percent. It also made the largest contribution to economic growth, at 0.97 percentage points.

The Industry Minister said the performance of the national manufacturing sector was supported by the contribution and confidence of industry players that continue to expand their production activities in Indonesia. Shell is one such company, reaffirming its commitment by strengthening its manufacturing base in Marunda.

Following the development of its Lubricants Oil Blending Plant (LOBP) in 2022, Shell’s lubricant production capacity in Marunda reached up to 300 million liters per year. The new Grease Manufacturing Plant (GMP) complements the facility with an annual grease production capacity of 12,000 tons.

“With this capacity, the Marunda GMP, according to Shell data, ranks among the top three Shell grease facilities globally. This demonstrates Indonesia’s important position in the expansion of Shell’s manufacturing operations,” he said.

The operation of the Marunda GMP is also significant for meeting domestic demand for grease products. In 2025, Indonesia imported around 22,377 tons of grease or lubricating products under HS code 27101944. Of this total, imports of Shell grease products under the Shell Gadus brand reached approximately 11,757 tons.

With the Marunda GMP now in operation, Shell Gadus products previously supplied from overseas can now be manufactured in Indonesia. The production capacity is expected to further strengthen domestic supply of grease while creating opportunities for import substitution and greater value-added production in Indonesia.

Beyond production capacity, the Industry Minister highlighted the importance of investment linkages with domestic industries in strengthening the manufacturing ecosystem. Shell currently works with more than 50 domestic vendors, with annual procurement valued at around Rp30 billion.