The Indonesian Various Ceramic Industries Association (Asaki) aims to increase the export of ceramic products to US$330 million by the end of this year, a significant growth from $210 million in 2009, says Asaki’s chairman.

“We’re optimistic this year’s export will reach $330 million despite the strengthening of rupiah against US dollar in the first quarter,” Achmad Widjaja told a press conference on the upcoming 2010 world ceramic tile manufacturer forum, Friday.

According to Asaki’s latest data, the ceramic industry’s annual production capacity reached an average of between 237 million and 243 million cubic meters for floor tile, 150 million cubic meters for roof tile, 253 million pieces for tableware and 5 million pieces of sanitary supplies.

Achmad believed the industry would grow despite worries over the market being flooded by cheaper imported ceramics, particularly after the implementation of free trade with China and Malaysia.

Domestic sales of ceramic products reached an average of Rp 15 trillion ($1.62 billion) annually, he said.

“The ceramics industry is fiercely protected by the government. It may be the only industry across the country that has such enormous protection,” he said.

The government imposes 20 percent import tariff on tiles and 30 percent tariff on tableware.

“Apart from the high import tax, all imported ceramics have to pay for surveyed reports at Sucofindo, they cost around $400 for each document,” he said, mentioning the safeguard and the zero percent sales-of-luxury-goods tax (PPnBM) as two other forms of protection.

Nevertheless, he added, the government should implement a strong energy policy for the industry.

“Overall, the [ceramics] industry sees no goodwill from the state electricity company [PT PLN] or the state-owned gas distributor [PGN],” he stressed, adding the industry might not expand without a sufficient energy supply.

The director general of Agro and Chemicals for Industry within the Industry Ministry, Benny Wachjudi, has said the government would manage the energy problems, even though the ceramics industry consumed almost 9 percent of PGN’s gas production.

“For the industry, the availability of gas supply is a must, although the industry’s gas consumption is lower than the fertilizer industry and PLN,” he said.

Apart from the lack of energy supply, he said, the industry still had to be strengthened due to the lack of technology, machinery, research and development and other supporting abilities, including financing.

Benny said most ceramics manufacturers used local financing.

“We are still in discussions with Bank Indonesia in assessing the industrial risks in order to make a competitive lending rate for the industry,” he said, adding the lending rate was based on the industry’s risks, expected profile and operational costs.

“If we can mitigate the risks, I hope we can reduce the lending rate,” he said, adding the government was ready to revoke its protection of the industry once the problems were resolved. (ebf)