Metalworkers' jobs at risk from downturn

Nana Rukmana, The Jakarta Post, Cirebon

The increase in fuel prices and a shortage of raw materials have left 23 metal factories in Cirebon on the brink of bankruptcy and hundreds of workers' jobs at risk, an official says.

Cirebon Metalwork Producers Association coordinator Ade Saefudin said government intervention was badly needed to save hundreds of workers from imminent dismissal.

"If production costs remain high, we predict the firms will eventually go out of business," Ade said.

He said the industry had started to feel the pinch since the first fuel price increase in March this year when the price of raw materials from Surabaya increased by up to 100 percent.

"Another fuel price increase in October has exacerbated the situation, with the increase in metal prices by 26 percent. This is a terrible blow to small-scale entrepreneurs like us."

He said the price of raw materials before the fuel price hike was between Rp 2,500 and Rp 3,000 a kilogram, which had surged from Rp 5,250 to Rp 5,500 a kg now.

The price of metal pipes has also increased sharply; between Rp 3,500 and Rp 4,000 a kg. to Rp 6,500 and Rp 7,000 a kg.

Ade said most of the companies produced household articles, such as fences and kitchen utensils.

Ganef Sugiarto, the owner of Pt Marta Putra Jaya in Jadimulya village, North Cirebon, said the price of a kilogram of aluminum used to be Rp 8,000 but had surged sharply, he said.

"The price also fluctuates and has the tendency to gradually rise. It has increased again by Rp 1,500 a kg. just within the past week to Rp 13,500 per kg. now," said Ganef.

Ganef said aluminum producers in Cirebon were becoming more pessimistic about manufacturing household items like cooking pots and frying pans.

"We had hoped scrap metal traders would supply us with the raw materials but they now prefer to sell them to bigger traders in Jakarta for export."

Ganef said the community-based industry was under the threat of a total shutdown if the problem with raw materials was not solved.

The family-run enterprises employ around 200 workers.

Ade said workers in the metalwork sector earned a "reasonable" wage above the regional minimum of between Rp 25,000 (US$2.50) and Rp 30,000 a day.

Ganef said neither regional nor central government had done anything to help the sector.

"There has been no attention from the government as yet, and this has let us down."