900 Ceramic Workers Face Lay-offs as Industry Chief Explains Causes

Jakarta, CNBC Indonesia – A wave of redundancies is beginning to hit the national ceramics industry amid problems with natural gas supplies. Thousands of workers now face uncertainty as manufacturers cut production capacity because energy supplies are insufficient.

Edy Suyanto, chairman of the Indonesian Ceramics Industry Association (Asaki), said the effects of gas restrictions were already being felt by industry players. Several companies have begun reducing operations to bring production into line with available energy supplies.

“As of today, based on information from industry colleagues, around 1,400 employees have been affected. About 500 were laid off in July, while around 900 are currently on furlough,” Edy told CNBC Indonesia on Friday (14 October 2026).

The situation is drawing concern because the ceramics industry had been trying to recover production performance throughout 2026. However, continuing gas restrictions mean companies face the risk of lower utilisation during a period that should have provided an opportunity to increase output.

Edy said capacity utilisation in the ceramics industry reached 75% from January to August 2026, up from 73% in the previous year. The target set at the start of the year was 78–80%, in line with increased demand supported by government programmes.

“Given the situation today and the restrictions on gas use, utilisation in October has fallen below 70%. If this continues through to the end of December, I am certain it will fall further below 70% in November and December, perhaps to around 60%,” Edy said.

The fall in utilisation could place further pressure on companies’ finances. If production continues to shrink, the industry will have less room to retain its workforce, particularly employees who are currently still on furlough.

Asaki raised the issue with the Ministry of Industry in mid-September. However, gas supply disruptions continued into October, meaning the industry’s operational certainty has yet to be fully restored.

“Automatically, the 1,500 affected employees I mentioned earlier—those who are still on furlough—could be moved to lay-off status. This is what we need to prevent,” Edy stressed.