CN
EN

CERAMIC·BATHROOM October 18-21,2018

Press

 

Indonesia Stalls for Time- Expansion Stop as Industry Suffers

Time:2018.01.04  Views:

Indonesia ranked 5th place in the world in manufacturing tiles in 2014, with production of 400 million sq meters. Vietnam replaced Indonesia in the following year with production of 440 million sq meters. Now Vietnam is going up a notch more with production of over 500 million sq meters by replacing Spain. ASAKI, Asosiasi Aneka Industri Keramik Indonesia (Indonesian Ceramic Industry Association), believes that when the property market rebounds, its production will rise to more than 500 million sq meters. However, Indonesia was 5th largest consumer last year with consumption of 369 million sq meters, after Vietnam's 412 million sq meters. 

Indonesia's dream of becoming the ASEAN hub for tiles has been stalled as the country could not recover from the slump that affected production and consumption this year also, for three years in a row. The production was much lower than 440 million square meters of 2014 despite increase of production capacity by about 100 million sq meters. The exports remain lower than imports. In fact, Indonesia has now become a hot spot of Chinese tiles that continues to enter in increasing quantities. 

There was a slight improvement in production. However, this upturn in output has been very small in quantity, estimated to be about 20 million sq meters. It increased the production to 370 million sq meters this year from 350 million sq meters of 2016. Weak real estate and property market has badly forced the tile manufacturers to continuously control production. "Capacity utilization remained at a lower level of 65 percent, although, improved a little from last year's 62 percent," said Elisa Sinaga, Chairman of ASAKl.       

Indonesian ceramic tile sector was affected by its unstable markets' at home and abroad both. Increasing floodgate imports from China have added additional unbearable burden because of their lower prices. A high degree of idle capacity was triggered by weak property sector, resulting in a significant decline in demand for tiles in the domestic market since past three years. 

Currently Indonesia has a production capacity of 580 million sq meters of floor and wall tiles of various qualities and sizes. ASAKI said production of tiles was 400 million sq meters in 2015, when capacity utilization was 66 percent. Since past several years Indonesia aspires to become the center of ASEAN tile trade with support of a booming production, driven by higher domestic consumption. But slower domestic demand following a slump in real estate market and construction of residential houses and other buildings have blocked the hope, at least for a couple of years, if not permanently, when Vietnam appears to be the largest exporter of tiles with highest production capacity in the ASEAN region.

 In 2016, of the total production of tiles, about 87 percent was allocated to the domestic market, while the rest was exported to various countries in Asia, Europe and America. Indonesia is not among the top 10 exporters, but it holds the 9th position among the top 10 importers with imports of some 57 million sq meters.

 Despite various measures to raise production and exports, Indonesia is now feared to be a big market of imported tiles. Sinaga said local tile sales have remained flat in 2017 but import is rising. Due to cheaper imports, local producers have to compete at the expense of profit.

 However, the Indonesian government is ambitious that tile production and exports will rebound with increase of consumption in the coming years. Industry Minister Airlangga Hartarto believes that Indonesia has a chance to utilize capacity at full scale to raise Indonesia's position to the fourth largest tile producer in the world from the current 7th. Airlangga claims the country has competitive advantages in the ceramic tile industry, especially considering its abundant natural resources that could be used for raw materials, as well as the country's largest consumer population in ASEAN. 

Tile manufacturers still have high hope of making Indonesia a center of tile as the country's huge consumer market remains untapped because of want of adequate transport infrastructure. 

ASAKI felt concerned about the future duty free imports from China and other ASEAN countries. Import duties for ceramic products that are shipped into Indonesia from other ASEAN countries and China will be scrapped to zero in next year, implying it will become increasingly difficult for Indonesian ceramic tile producers to compete with their ASEAN and Chinese counterparts. 

Sinaga said the high logistics costs in Indonesia form a major obstacle that undermine the competitiveness of Indonesian tiles. He claims it costs approximately USD $400 to transport products from China to Jakarta, while it costs about USD $800 to transport products from Jakarta to Medan in North Sumatra of Indonesia. Indonesia's current production capacity could make Indonesia the world's fourth-biggest ceramic tile producer, said Sinaga. He warns that if the situation deteriorates, it could lead to industrialization because Indonesian tile manufacturers simply change into traders who import from abroad. 

As the tile production cost in Indonesia is rising, imported tiles have been grabbing a big market share every year. ASAKI said the local manufacturers are worried about the increasing influence of the foreign tiles for their lower cost This year's tile trends are a reflection of the growing demand for personalized design throughout the home, even in utility spaces. Have you noticed that grey always serves as the dominate hue among all kinds of ceramic tiles and is much-loved by designers? 

This part, we will show you a whole series of grey ceramic tiles. Let’s grab some inspiration from below exquisite products. New & Hot Sale Ceramic • World Indonesia Stalls for Time - Expansion Stop as Industry Suffers Appreciation of Trendy Grey Tiles Elisa Overland Import Issues Voncol Voncol Roma Ceramic and competitive quality. According to the Geneva based International trade Centre (ITC), Indonesian ceramic export remains stagnant due to lower demand, while import is rising despite slowdown in consumption during weak property markets. Due to unstable demand in the past few years, capacity utilization in the factories remain 62-66 percent. 

Comment interaction