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[July 2008]
Raw Material Shortfall May Affect Indonesian Ceramic Industry
Local reports say that the Indonesian ceramic industry risks facing a production decline in the next two years due to the illegal export of raw materials. The Association of Indonesian Ceramics Industry chairman Achmad Widjaya recently said that the illegal exports of clay, silica sand and some chemical products accounted for some 20% of the total need for raw material in the local ceramic industry.
"This may lead to a cut in national production by 20 percent from the current capacity of 330 million square meters,” he said. The illegal export could also hurt other industries using ceramic product raw materials, such as the glass and paint industries.
Mr Widjaya said the illegal export had occurred over the last five years, driven by high international prices. The average price of non-metal mining products currently stands at US$80 per ton, up 75% from last year. Most of the products are said to have gone to Taiwan, Thailand, Vietnam and China.
Ceramic factory products comprise about 40%to 50% non-metal mining products and about 7% to 10% chemical products. According to Industry Ministry data, the growth of the non-metal mining industry has been decreasing. In 2004, the industry grew 9.6%, but dropped to 3.8% in 2005 and to 0.5% in 2006.
Critics have said that the government's high export duties for ceramic products may have contributed to the illegal activities. The government imposes a 20% export duty on ceramic tile and 30% on ceramic tableware.
The Association is still upbeat that this year's export target can be achieved, however. "We're optimistic our export can reach $350 million as there are no gas problems anymore, which affected our export last year." In the first semester, the country's ceramics exports reached $150 million, mostly generated from tableware, sanitaryware and decorative ware, it is reported.
ENDS