Govt urged to protect tableware industry

Govt urged to protect tableware industry

The Jakarta Post, Jakarta

The Indonesian Trade Safeguard Committee (KPPI) announced on
Saturday that it had recommended to the government that it take
protectionist measures for the local ceramic tableware industry
through the imposition of additional tariffs over the next three
years on imports.

The Committee has recommended that the government place an
additional import duty of Rp 1,600 (17 U.S. cents) per kilogram
on imports of the products in the first year and gradually reduce
this to Rp 1,400 and Rp 1,200 in the second and third year
respectively.

The so-called "safeguard" tariff wall should be imposed on
imports from China, Hong Kong, South Korea, Singapore, Japan,
Taiwan, Germany, Italy, the United Kingdom, the United States,
France and Australia, the committee recommends.

It has excluded ceramic tableware exports from India, Malaysia
and Thailand on the basis that they are developing countries
whose exports are "harmless" to the country.

KPPI chairman Ridwan Kurnaen said the committee forwarded the
recommendation to Minister of Trade Mari E. Pangestu last week.

"The Ministry of Trade and Ministry of Finance will have the
final say. We have done our job in providing recommendations
based on our investigation," Ridwan said.

The KPPI agreed in October to investigate whether damage had
been inflicted on the local industry by surging imports of
ceramic ware in response to complaints from petitioners ceramic
tableware manufacturers PT Lucky Indah Keramik and PT Queen
Setyabudhi Ceramics -- whose combined production accounts for
about 55 percent of national output.

The committee found that the commodity imports surged by
almost three and a half times from 11,603 tons in 1999 to 40,018
tons in 2003.

The surging imports boosted the imported products' share of
the domestic market from 32 percent in 1999 to 61 percent in
2003, overwhelming local ceramic tableware sales.

After evaluating trends in the local industry as regards
sales, profits and losses, market share, production, capacity
utilization, wages and employment, the committee concluded that
the imports had caused serious injury to the industry.

"In 2002, total sales started to drop, although profits have
been actually declining since 1999, while the biggest loss was
suffered in 2003. The deteriorating performance is a result of a
surge in the import of cheaper goods compared to local products."

"Such a situation will result in a reduction in capacity
utilization and eventually large-scale lay-offs," the
announcement said.

Indonesian Ceramic Industry Association (Asaki) foreign
affairs director, Indra Kangean, said the industry used to
directly employ 20,000 workers, but now only employed 10,000.

Under WTO rules, the government can impose a provisional
measure on an imported product for a maximum of 200 days after
the country's safeguard committee launches an official
investigation.