LPG conversion program sends stove producers to bankruptcy in regions

Nurni Sulaiman and Agus Maryono ,  The Jakarta Post ,  Balikpapan, Purbalingga   |  Wed, 06/17/2009 1:22 PM  |  The Archipelago

Kasiyem, 69, can only stare at her kerosene-fueled stoves helplessly as the East Kalimantan administration has begun distributing free gas cookers and canisters as part of the central government's kerosene-to-gas conversion program.

A resident of Karangrejo subdistrict, Balikpapan, East Kalimantan, Kasiyem said that ever since the distribution of free gas cookers was conducted some three months ago, the sales of her products had dropped by 99 percent.

"I could earn Rp 3 million a day before kerosene was converted to LPG *liquefied petroleum gas*. Now, there are days I don't have any customers," Kasiyem said.

That day, she said, she had only earned Rp 140,000 (US$14), or Rp 100,000 more than the previous day.

Kasiyem said she had started her business in 1968, but was able to grow successfully in 1981 after she started receiving loans from a state-owned bank. She first borrowed Rp 2.5 million. Her last loan, for which she had to pay for a monthly installment of Rp 6 million, was Rp 120 million.

"I still have another two years of installments to pay. I just don't know how I will cope if my earnings are like this," Kasiyem said.

To survive, she added, she had to sell her car and send 12 of her employees to Java. She plans to sell her factory and house in Penajam Paser Utara because she might not be able to run her business anymore.

Purwanto, 45, a kerosene-fuelled stove producer from Munjul Sabrang subdistrict, Kutasari district, Purbalingga regency, Central Java, also experienced the same problem.

"I'm completely hopeless. We have stopped production for the last two weeks. No more store is willing to accept our products, as a result of the kerosene-to-LPG conversion," Purwanto said.

Purwanto is only one of 20 stove makers in Munjul Sabrang, which has long been known as a stove-producing village.

All, including Purwanto, have stopped making stoves.

Purwanto could previously produce up to 1,000 stoves a month, with a total average turnover of Rp 50 million. He employed 15 people, who have all been sent home.

"I feel sorry for them. But, I can't do anything else," Purwanto, who had been in the business for 15 years, said recently.

He said he used to market his products to Banyumas, Purbalingga, Banjarnegara and Cilacap regencies. Right before local administrations distributed free gas canisters and cookers, his products always sold, he said.

"I really don't know what to do now. I want to set up another business but I still wonder what kind I should start."

Purbalingga regency administration spokesman Prayitno said it was deplorable that Munjul Sabrang would probably loose its reputation as a stove-making village.

"We do hope there will be a solution. We will see what we can do together *to deal with the problem*," Purwanto said.

He added that the energy conversion had started last month and was 95 percent accomplished.

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.