Lotte Chemical Corp., the petrochemical unit of South Korean conglomerate Lotte Group, said Friday it is spending US$3.9 billion over the next three years to build a petrochemical complex in Indonesia.

Lotte Chemical signed a preliminary deal with Indonesia’s Ministry of Investment on the Line project aimed at constructing a naphtha cracking factory by 2025 in the western region of Banten on the Southeast Asian country’s Java island, it said in a release.

The factory will have an annual capacity to produce 100 tons of ethylene, 520,000 tons of propene and 250,000 tons of polypropylene, the company said.

The Indonesian government will provide Lotte with lower tariffs and various tax benefits, according to Lotte.

Through the project, Lotte expects to see about $2.06 billion in annual sales, the release said.