Ceramic producers demand govt help

The Jakarta Post, Jakarta

Local ceramics producers are crying out for government help in facing an influx of cheaper Chinese-made products, which they say are threatening their survival.

Many local producers have either gone bankrupt or cut their workforce due to poor sales as a result of the flood of Chinese- made products, the Indonesian Ceramics Association (Asaki) said.

It warned that more companies could experience the same fate unless the government did something to help.

"About three ceramics firms have closed down over the past two months while many others have temporarily laid off workers," Ahmad Wijaya, vice chairman of the association, told The Jakarta Post over the weekend.

The association has about 60 members.

He said the country's ceramics factories, which have a combined production capacity of 200 million square meters of ceramics every year, are now operating at between 50 percent and 70 percent of capacity.

Ahmad said local producers were still puzzled as to why imported Chinese ceramics were able to be sold cheaper than local products on the Indonesian market.

"It is hard to belief as the importers must pay the shipping costs to bring the Chinese products to the local market. But, this is the reality that we are facing now," he said.

Ahmad said the association had often complained about the problem to the Ministry of Industry and Trade, but it was still waiting for action.

One of the solutions proposed by the association is that the current 10 percent import tariffs on the two main raw materials for ceramic products -- glaze and feldspar -- be eliminated. Glaze and feldspar are substances used as coatings to give ceramic products their glossy appearance. Indonesia imports these materials from India, Italy, France and a number of other European countries.

"We want the government to eliminate the tariffs on these two materials so that our products can compete with the imported products," he said.

The association has also called for the removal of luxury tax on sanitary ceramic products, including toilet bowls and bathroom sinks. The tax on these now stands at 25 percent.

The association also blasted the government's approval of state gas distribution company PT PGN's plan to raise the price of gas to US$2.5 per million British thermal units (MMBTU) next month, up from the current $2.3 per MMBTU.

It said the price increase would raise its members' production costs by 15 percent, and aggravate their difficulties.

"We aren't asking for subsidized gas from the government. We just want the plan to be delayed until conditions get better," he said.