Indonesia's Tile Makers Hurt by Gas Shortage

Jakarta, Indonesia, July 1, 2010--With a continuing natural gas shortage, local ceramic tiles producers have been unable to increase production to meet surging demand from Indonesia’s property industry, a ceramic tile producers association says.

With the gas supply available, the association’s members were only able operate at 90% of capacity, Indonesian Ceramic Tile Producers Association (Asaki) chairman Achmad Widjaja said in Jakarta on Wednesday.

“We have to increase our production capacity to meet increased demand. But with the ongoing gas shortage, increasing production is out of question,” he told reporters after the official opening of the Indonesia Building Technology Expo and World Ceramic Tiles Forum at the Sultan Hotel.

Indonesia’s ceramic tile production had not increased from about 300 million square meters a year for the past several years, despite the surge in demand from the growing property industry.

This year, demand for ceramic tiles is expected to increase by between 6-8%.

Achmad said the local producers sold about 80% of their products on the domestic market, while the remaining 20 percent was exported. According to Asaki data, Indonesia’s ceramic tile exports were mostly to the U.S., Australia, Sri Lanka and Bangladesh, and were worth a total of US$45.11 million in 2009.

In order to meet demand for tiles, many property developers also imported from China, Vietnam and Malaysia for certain products that were not available in Indonesia. Indonesia’s ceramic tile imports reached a total of $33.14 million in 2009.