Pumice stone business in Lombok
The report in Kompas on Aug. 12, 1995 on the situation of Lombok (West Nusa Tenggara) pumice stones proves what we stated in our last letter.
The purpose of our writing again is to express our protest against a Lombok official's denial that the Lombok pumice stone monopoly has resulted in large losses to Indonesia and a harder life for the local people.
The safeguards set up by the local official allowed the monopoly to appear between 1990 and 1993.
The losses to Indonesia are:
1. Import statistics from the Hong Kong Trade Department shows that in 1989 there were 350 x 40" containers = 1 x 40 cont's = 750 bags x 350 cont's = 262,500 bags of Lombok pumice stones imported into Hong Kong, bit in 1995 this slipped to 150 cont's x 40" = 112,500 bags. A drop of 58 percent. In Hong Kong the loss of income of the foreign exchange of Indonesia has reached US$600,000.00 in one year. The total amount of the loss from 1990 to 1995 is estimated to be US$36,000,000.
2. During this period, about 600,000 bags of pumice stones were lost to mildew in the warehouse at Lombok Lembar Port. The economic loss reached about US$2,000,000. Anyone can find this out by visiting Lembar port.
3. During this period, about 1,500,000 bags of pumice stones were kept in the exporters' warehouse in Surabaya. The exporter has not sold the stones since 1993. The remaining 400,000 bags of pumice stones are in a warehouse in Surabaya Kalimas and Gresik.
4. In 1989, there were more than 200 pumice stone factories in Lombok. Now there are only 73 factories. The factories have been closed down, workers have lost their jobs, and the government has lost taxes.
The losses to Indonesia are great, but the monopolists and certain people have made huge profits.
The Lombok government still hasn't learned its lesson. Instead, in March 1995, they extended the pumice stone monopoly.
Some facts about Lombok's pumice stone business follow:
1. It's stipulated that the monopolists should purchase 250,000 bags of pumice stones a month, but they only purchase 120,000 bags. They can define the amount the want or use any excuse to reject the goods. Furthermore, the manufacturers cannot sell the pumice stones to anyone else.
2. The purchase price of a bag of pumice stones is Rp. 1,750, but the monopolist can purchase a bag for Rp.1,200 without regard for the workers' lives.
3. The monopolists can move security guards to block the east harbor of Lombok and even watch the sun-dried pumice stone ground of the manufacturers.
4. The monopolists also use their power to close the Lombok Lembar Port warehouse, where they keep 550,000 bags of already taxed pumice stones, and force the owners to sell them at a much lower price. They have failed to do so, but the dispute is not yet settled.
5.It's ridiculous that the market in Java, Hong Kong and other countries is in short supply of pumice stones, while the monopolists in Lombok horde a stock of 800,000 bags. These stocks were purchased at an unfair price by bullying and oppression. The monopolists then hike the price from Rp. 3,300 a bag to Rp. 5,500 per bag in Surabaya. Since the price is too high, few people are willing to buy, leaving 800,000 bags in stock plus the 400,000 bags owned by the manufacturers but rejected by the monopolists.
Since the manufacturers can produce 250,000 bags a month between August and December because it is sunny, total production can reach 1,250,000 bags.
It is simple to understand that pumice stone monopoly in Lombok has not only damaged the Indonesian economy but also adversely affected the local people.
Hong Kong Pumice
Stone Group
Hong Kong