Lack of raw materials may hit ceramics industry

Novia D. Rulistia , The Jakarta Post , Jakarta | Mon, 07/14/2008 10:08 AM | Business

The ceramics industry risks facing a production decline in the next two years due to the illegal export of raw materials, an association says.

Association of Indonesian Ceramics Industry chairman Achmad Widjaya recently said the illegal exports of clay, silica sand and some chemical products accounted for some 20 percent of the total need for raw material in the industry.

"This may lead to a cut in national production by 20 percent from the current capacity of 330 million square meters," he said.

In addition, he said, the illegal export could also hurt other industries using ceramic product raw materials, such as glass and paint industries.

Achmad said the illegal export had occurred over the last five years, driven by high international prices. The average price of non-metal mining products currently stands at US$80 per ton, up 75 percent from last year.

Most of the products went to Taiwan, Thailand, Vietnam and China, he said.

Ceramics factory products comprise about 40 percent to 50 percent non-metal mining products and about 7 percent to 10 percent chemical products.

According to Industry Ministry data, the growth of non-metal mining industry has been decreasing. In 2004, the industry grew 9.6 percent, but dropped to 3.8 percent in 2005 and to 0.5 percent in 2006.

Critics have said the government's high export duties for ceramic products may have contributed to the illegal activities.

The government imposes a 20 percent export duty on tile ceramics and 30 percent for ceramic tableware.

The association is still upbeat this year's export target can be achieved, however.

"We're optimistic our export can reach $350 million as there are no gas problems anymore, which affected our export last year."

In the first semester, the country's ceramics exports reached $150 million, mostly generated from tableware, sanitation products and decorations.

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