Shell’s Indonesia Grease Plant Targets Import Substitution

RRI.CO.ID, Jakarta - British energy and petrochemical company Shell is expanding its manufacturing footprint in Indonesia. Its new facility in Marunda, Bekasi, West Java, has an annual production capacity of 12,000 metric tons of grease, paving the way for import substitution.

“For the Indonesian government, this investment is important because it brings new production capacity and manufacturing technology, while also strengthening linkages with supporting domestic industries,” Industry Minister Agus Gumiwang Kartasasmita said during the inauguration of the Shell Grease Manufacturing Plant (GMP) in Bekasi on Wednesday, September 16, 2026, as quoted on the ministry’s official website.

The GMP facility complements the Lubricants Oil Blending Plant (LOBP) developed by Shell in 2022. The Marunda LOBP now has a capacity of up to 300 million liters of lubricants per year.

“With that capacity, the Marunda GMP, according to Shell’s data, ranks among the top three Shell grease facilities globally,” Minister Agus said. This position strengthens Indonesia’s role in the company’s global manufacturing network.

Import substitution is one of the key impacts of this investment. Indonesia’s grease imports under HS code 27101944 are projected to reach around 22,377 metric tons by 2025, including approximately 11,757 metric tons of Shell Gadus products.

With domestic production now available, Shell Gadus--previously imported--can be manufactured in Indonesia. The government views this as an opportunity to increase value-added while strengthening domestic supply.

The investment also benefits supporting industries. Shell has partnered with more than 50 domestic vendors, with procurement valued at around IDR 30 billion (USD 1.69 million) per year. “The involvement of domestic vendors serves as a solid foundation for building an increasingly robust domestic supply chain ecosystem,” Minister Agus said.

GMP Marunda has implemented automation and modern manufacturing technologies. The LOBP area also utilizes solar panels that generate approximately 1.1 million kWh per year, meeting 17 percent of its electricity needs.

This investment comes as the non-oil and gas processing industry (IPNM) grew by 5.32 percent in the second quarter of 2026 (Q2 2026), surpassing the national economic growth rate of 5.29 percent. The sector contributed 0.97 percentage points to overall economic growth.

Agus hopes the Marunda facility will develop into a production base for grease for the regional market. “We’re starting in Indonesia, strengthening Indonesia, and in due time bringing products made in Indonesia to regional and global markets,” he said. ***