Craftsmen hit by higher fuel prices<\/p>\n
Slamet Susanto, The Jakarta Post, Yogyakarta<\/p>\n
Higher production costs prompted by the government's decision to
\nraise fuel prices on Oct. 1 have forced hundreds of handicraft
\nproducers in Yogyakarta to cut production by up to 40 percent.<\/p>\n
Hundreds of others have had to halt all production and lay off
\nworkers because of a fall in orders in the wake of the Bali
\nbombings in October.<\/p>\n
The owner of a wooden batik handicraft workshop in Krebet,
\nBantul, Yogyakarta, Tugiyo, 35, said he had halted all production
\nfor the past three weeks because of a business slowdown. In
\nnormal times, he ships more than 80 percent of his products to
\nBali.<\/p>\n
\"Since the second Bali bombings, demand has dropped and I am
\njust working now on filling old orders. We are in a difficult
\nperiod now, with low demand and surging production costs because
\nof the fuel price hike,\" the father of one told The Jakarta Post.<\/p>\n
Before the fuel price increase and the bombings, his workshop
\nproduced a container of wooden batik products each week, earning
\na net profit of between Rp 4 million (US$400) and Rp 5 million.
\nNow he cannot even afford to pay his employees.<\/p>\n
\"I had to lay off most of the 300 workers here because of the
\nsluggish business,\" said Tugiyo.<\/p>\n
Riyadi, 42, a craftsman in Pajangan, Bantul, said most people
\ninvolved in the handicraft industry has seen their profits drop
\nby as much as 25 percent because of higher production costs since
\nfuel prices went up. He said he used to make a 10 percent profit
\non annual turnover of Rp 300 million before the fuel price
\nincreases, but the rise in the price of raw materials had
\ndrastically reduced profit.<\/p>\n
Riyadi said the price of sengon wood had gone up to between Rp
\n600,000 and Rp 800,000 a cubic meter, from Rp 400,000 to Rp
\n500,000. Other types of wood have also become more expensive,
\nincluding klepu wood which now costs from Rp 700,000 to Rp
\n900,000 per cubic meter, up from Rp 600,000 to Rp 700,000.<\/p>\n
An employee at the Peni batik workshop, Tati, 24, said it was
\nimpossible to raise prices to keep pace with the rising cost of
\nraw materials.<\/p>\n
\"It is because of people's lack of purchasing power. Consumers
\nmight be scared off if we increased prices,\" said Tati.<\/p>\n
Some 60 leather craftsmen in Manding, Bantul, find themselves
\nin a similar position. The high cost of raw materials and
\ntransportation has forced more than 20 craftsmen to stop
\nproduction, while others are experiencing dropping profits.<\/p>\n
\"Monthly turnover used to reach Rp 40 million, from which I
\ncould pocket a profit of 10 percent to 20 percent. Now I am lucky
\njust to stay afloat,\" said one leather handicraft producer, July.<\/p>\n
There are thousands of craftsmen spread across Yogyakarta,
\nincluding producers of bamboo handicrafts in Mlati, Sleman,
\npottery in Kasongan and Pundong (both in Bantul regency), and
\nsilver goods in Kotagede.<\/p>\n
Most have experienced declining profits and many small-scale
\ncraftsmen have been forced to stop operating until the economic
\nsituation improves.<\/p>",
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