Abstract

Indonesia's petrochemical sector contributes to 3% of Indonesia GDP and its demand should soon grow by 5% per year due to Indonesia's economic expansion.  This is correlated with the economic expansion of Indonesia, since petrochemical derivative products are utilized in the production process of plastic products, pharmaceuticals, and textile.  The Indonesia government put high effort on the integrated petrochemical industry development toward green industry in order to achieve better economic performance. The overall objective of this study is to draw the relationship between internal green supply chain management (GSCM) and external GSCM practices on economic performance of petrochemical industry in Indonesia. Internal GSCM consist of eco design and internal environment management. Whilst external GSCM consist of green purchasing and reverse logistic. This study was conducted among petrochemical olefin manufactures based in Banten Province Indonesia. The result showed that Internal GSCM has no direct effect on economic performance, but external GSCM has a positive effect on economic performance. The external GSCM practice implementation not only reduce any cost from waste treatment, environment accidents, and energy consumption toward profit achievement as well as profit growth over the years, but also generate sales and earnings.

Keywords

Internal Green Supply Chain Management, External Green Supply Chain Management, Petrochemical, Economic Performance,