Associations want certainty in gas supply

A number of businesspeople engaged in ceramics and rubber gloves business are mulling over relocating their factories abroad unless the government gave certainty about the gas supply to the industry.

"The uncertainty in the supply of gas has driven the existing ceramics producers to think of the possibility of relocating their factories in Malaysia and Thailand," the Indonesian Association for Diversified Ceramics (Asaki) Achmad Wijaya told Bisnis Indonesia in Jakarta Tuesday.

The Indonesian Association for Rubber Glove Industry's chairman A. Safiun is of the view that a number of rubber glove companies are impatient to wait for sufficient supply of gas that the government has promised.

"Because the government has yet to meet its promise (to supply gas), a number of companies are calculating (the cost) if they relocate their factories to Malaysia and Thailand," he said, adding that the two countries could ensure sufficient supply of gas.

"The ceramics companies only receive an average 70 percent of gas approved in the contract, whereas we purchase the gas from PGN at US$ 5 MMBTU, which is very high," Wijaya said.

Under this situation, the rate of utilization of ceramics only reached 50 percent in the first quarter or an eight percent down, compared to the corresponding period in the previous years.

He added that several ceramics companies have used coal as an alternative energy but the calorie of coal in Indonesia is low at 6,000 Kcal/kg, whereas the ceramics need energy heat of up to 9,000 Kcal/kg.

Despite the uncertainty of gas supply, a ceramics company from UK, Royal Doulton, plans to go ahead with its move to invest in the ceramics industry in Indonesia.

Meanwhile, director general for agro and chemicals industry of the Ministry of Industry Benny Wahyudi said that the Ministry of Industry and Ministry of Energy and Mineral Resources have drawn up a master plan to synchronize the supply and the need of gas for industry. (*)