ceramic tile industry: its condition and propects in the era of crisis.
The cost of ceramic tile production has soared, especially since the procurement of ceramic tile base materials is partly dependent on imported sources.
Meanwhile, the construction industry--
In particular, the development of properties such as office buildings, shopping malls, hotels, apartments and real estate ---
It has stopped its activities due to mistakes in the business sector.
Retail market of building materials--
Composed of families and individuals-
People\'s purchasing power has declined due to the currency and economic crisis.
As a result, the performance of the donesia tile industry continues to deteriorate, despite the 33 increase in installed capacity in the industry. 5% in 1997.
According to the data consulting company, the total domestic consumption of 1997 of ceramic tiles is only 140.
2 million square meters, under 12
Growth of 8% over the previous year.
I. It is expected that the decline will be higher in 1998. e.
At least £ 30% due to greater pressure from the crisis.
The Ministry of Industry and Trade estimated that the capacity utilization rate of the ceramic industry was 1998, only 30%.
This situation actually prevented new investors from entering the tile industry, and it can be seen from the facts that no investment project in the industry was approved in the first 10 months of 1998.
Due to weak domestic demand, Indonesian ceramic manufacturers have to seek ways to boost exports.
With the sharp depreciation of the Indonesian rupiah against foreign currencies, especially the US currencyS.
Indonesian ceramic tile producers have the opportunity to make high profits from exports.
However, the problem is that the ceramic tile export market is not easy to penetrate because they are already facing fierce competition.
Assuming that production costs in Indonesia are very low, foreign buyers often ask Indonesian tile producers to sell their products at prices below the international market price.
Indonesia exported only 28,452 tons of tiles last year. worth US$ 11. 7 million)
With 33,830 tons (worth 13. 3 million)in 1996.
In the first four months of 1998, such exports amounted to only 13,815 tons, valued at $4. 6 million.
The fundamentals of Indonesian ceramic tile manufacturers to the domestic market.
Indonesia is a developing country with a large population, providing a market with great potential for absorbing building materials including ceramic tiles.
In fact, Indonesia has always been one of the key target markets for foreign ceramic tile producers.
The fact that as many as 41,957 tons of ceramic tiles are imported from Indonesia can be seen (worth US$ 15. 9 million)in 1997.
In 1996, the number of such imports was larger (54,092 tons)
So is the value (US$ 20. 9 million).
These import figures are higher than the number and value of ceramic tiles that Indonesia has managed to export.
Some ceramic producers have also produced a new type of product called Granito tile, which is mainly used by luxury houses and highrise buildings.
The Granito tile is a homogeneous ceramic tile, which means that each part of it is made from the same mixture of materials.
The surface of the Granito tile is glazed.
Since it must be homogeneous and sturdy, it must be made up of high-
One of the advantages of Granito tiles over conventional products is that the former is stronger and the water is less
Absorbed than the latter.
This means that granito tiles are more vulnerable to impact and scratches than regular products.
In addition, the color of granito tiles is also more durable than the color of ordinary products.
The main basic materials of granito products, like ordinary tiles, are as follows: feldsp stone, clay, pigment and silica sand.
The clay part of the Granito tiles comes from imported sources. [Figure omitted]
Tile Indonesia is in a favorable position in the production of ceramic tiles: a large number of basic materials have been found in the country;
Low labor wages;
Per capita domestic consumption is still very low, even the lowest level in ASEAN.
This condition provides a good opportunity for Indonesia to develop the ceramic industry.
Among other things, the tile industry in Indonesia produces tableware, wall and floor tiles, sanitary ware, insulator, roof tiles and crafts.
The ceramic industry is growing most rapidly, followed by the tableware industry.
Ceramics are a final product by burning certain non-
Metal minerals at very high temperatures. The non-
The metal minerals used in the production of ceramics include clay, kaolin soil, feldsar Stone, quartz sand and other additives.
Types of ceramic products produced in large quantities in Indonesia-
The proportional basis is wall tiles, floor tiles, bricks and roof tiles.
Basically, the size and shape of the tiles are standardized.
However, the tiles have different physical properties, especially the hardness of the surface.
In this regard, the tiles are divided into three categories: light/traffic, semi-light
Medium and mediumduty/traffic.
Light/traffic tiles for semi-open housing
Medium and medium duty/transport tiles are used for buildings where there are a lot of people going back and forth like shopping malls, hospitals and hotels.
The process of ceramic tile production includes the following stages: processing of basic materials, stamping of the body, production of upper light, printing and combustion (inside akiln).
The production of the upper light can be carried out before or after combustion by dipping, spraying or smearing.
From the surface, there are two types of ceramic tiles: glazed and unglazed.
Almost all tile producers in Indonesia produce these two types of tiles.
There are also two types of tiles according to the design: regular and textured tiles.
Most tile producers produce ordinary tiles in white or gray, and almost all of them produce marble-designed tiles.
The tiles have different colors, mainly light, dark, chestnut and Brown.
In light colors, blue and green are the most produced.
Pink and peach are the main pastel colors.
Tiles are divided into three different size categories: small (
Up to 200 cm² hard), medium (200-
900 m²), and large (
More than 900 square centimeters).
Of tiles of different sizes, the most produced are tiles with a surface of 10x20, 20x20 and 30x30 cm².
There are a large number of imported basic raw materials Clay, feldsp stone and kaolin soil in Indonesia.
However, due to the low quality, some ceramic tile producers use imported clay, feldsp stone, and clay. To make high-
Quality tile-like granito products, producers use feldsp stone imported from amongothers, Turkey, clay imported from Ukraine, and pigments imported from Spain. Silica sand (kaolin)
Due to the low quality of local clay, it is mainly purchased from imported sources.
It is used not only by the tile industry, but also by other industries such as paper, rubber, paint and pharmaceutical.
For the period from 1993-
1997, Indonesia\'s kaolin soil imports showed a downward trend.
In 1995, it reached a peak of 108 tons, an increase of 74 tons.
From 7% tons in 1994 to 75,597 tons.
In 1997, it fell to 106,393 tons.
In the same period, the number of such imports grew at an average annual rate of 14%.
The first four months (January-April)
In 1998, according to the Central Bureau of Statistics, the number of imports reached 23,111 tons, worth $6. 4 million. Table -
1 Indonesia imports kaolin soil, 1993-1998 (*)January -
April Source: The Central Bureau of Statistics/data consultation annual production capacity of 0. 227 billion square meters of the rich supply of basic materials and the large size of the Indonesian population is one of the most important factors leading to the expansion of ceramic tiles in Indonesia\'s industry.
The production capacity of the industry has grown rapidly, from 0. 17 billion square meters per year in 1996 to 0. 227 billion square meters or 33 m² square meters. 5%. Table -
Indonesian tile production capacity, 1993-
1997 Source: Ministry of Industry and Trade/Asaki/Data consulting according to the Ministry of Industry and Trade produced the most floor tiles, currently there are 43 ceramic tile manufacturers in Indonesia, with an annual production capacity of 0. 227 billion square meters.
They almost all produce floor tiles. Some 71.
9% of the installed capacity or 163,300,000 per year is used for the production of floor tiles and the rest for the production of wall tiles.
Largest ceramic tile production PT Keramik indonesiasosiasi (KIA)
Established in 1970.
Initially, the company operated under foreign investment (PMA)
It is planned to have only one factory located in Tanjung Pandang, Belitung.
In 1992, PT kiached transformed its position into a position to operate under domestic investment (PMDN)scheme.
PT Limited is affiliated with the Arya Upaya group, which itself is owned by the Ongko Group and currently has two porcelain brick factories with an annual production capacity of 24 million square meters, one in Belitong and the other in silensi, Bogo.
As a pioneer in the Indonesian ceramic tile industry, PT Kia has recently diversified a new product. e. roof tiles.
The company\'s roofing tile production plant is located in Java and is managed by two of its affiliates, namely, PT Serpih Mas and PT kermas Mas.
The production capacity of PT Serpih Mas is 12.
Roof tiles of 8 million square meters and PT Keramik Mas 19 per year.
Initially, the joint venture of PT Kia ofSingapore owned itself quickly & Co (46. 2%)
With local partner Kaharudin Ongko (36%), DiahKoswara (14. 8%)
Darwin Sadie Hadi (3%).
Following the change of status to PMDN company in 1992, PT Holdings became a listed company in 1994, and its equity composition was changed as follows: 67.
The PT Ongko multi-corpus has 53%, 3.
06% by Kaharudin Ongko, and29.
41% of the public.
Other key players in the Indonesian tile industry are as follows: PT Mulia Keramik Indahraya (
Has the ability to produce 29 million square meters of floor tiles and 17 million square meters of wall tiles per year, and sells its products under the brand \"Mulia Keramik;
PT Senrico Djaja Mariner industry (
Member of the Manunggal Sempurna group)
Have \"SuperItalia\" products; PT Angsa Daya (
Have \"IKAD\" products;
PT Jinghua Megah/PT Satyaraya KeramindoIndah (
Member of the Satya Djaja group)
With its products of \"Rome\" and \"royal;
And PT Asian victory Industrial Co. , Ltd.
Have \"Asian tile\" products.
There are also brands of ceramic tile products in the domestic market to cater to China-
Low-income earners (simple houses).
PT Senrico Djaja Mariner industry (SDMI)
The company began commercial operations in 1979 and also has sanitary ware and tableware production units.
The SDMI factory is located in Jakarta and has the ability to produce 10.
Tile products of 2 million square meters per year.
PT Angsa Daya operating under domestic investment (PMDN)
The company, which is part of Keida group, is known for its glassware products.
The company started operations in 1977 and sold ceramic tile products under the brand \"IKAD.
As for its tableware products, they are sold under the brand name.
\"In addition to producing tiles and cutlery, PT AngsaDaya also produces brick fire-proof roofs, granite tiles and mozaic tiles.
Both PT Metropole Megah and PT Satya Raya Keramindo Indah are affiliated to the Satya Djaja Raya group, which is itself a Wood Group
Business group based.
The factories of the two companies are located in wulongagong, East Java.
PT Metropole Megah, which started operations in 1979, now has the ability to produce 22 million of the tiles per year and sell them under two different brands, \"Royal\" and \"Rome.
\"The company is currently the largest ceramic tile producer in East Java.
In addition to PTMetropole Megah and PT Satya Raya Keramindo Indah, the other two tile producers of Fast Java are PT Asia boyyindustries Co. , Ltd.
And PT Keramik Diamond Yingda (KDI).
Like PT Metropole Indah, KDI is affiliated to a timber company
Headquartered in the business group of KayuMas International Group.
Pt kdi not only produces floor tiles and wall tiles, but also special tiles for export.
These exclusive tiles are sold under the brand \"Diamond tile.
\"In addition to the purchase order, PT Asia Vicente Industries and PTKDI provide the purchase contract agreement.
At present, the annual production capacity of the two companies is 25 million and 9 million respectively. Table -
1997 Source: Ministry of Industry and Trade/data consultation after several years of rapid growth, production growth slowed and ceramic production in Indonesia began to decline in the medium term
1997, particularly because of the currency and economic crisis.
As mentioned earlier, the economic crisis caused the construction industry to stop its activities and the purchasing power of the people to weaken.
At the same time, export demand is also shrinking.
As demand continues to decline in the market, Indonesian ceramic tile manufacturers have to gradually reduce productivity because of the cost of purchasing basic materials--
Especially in basic materials. -
Continue to soar.
In 1997, the total output of Indonesian tiles reached only 139.
3 million, down 12.
Growth of 2% over the previous year.
Due to the deterioration of the national economy, it is expected to decline at least 30% this year. Table -
4 Indonesian tile production, 1993-
1997 Source: stagnant export demand in the last five years of the Ministry of Industry and Trade/data consultation (1993-1997)
The export volume of Indonesian ceramic tiles showed a downward trend and fluctuated greatly.
For example, it reached 31,367 tons in 1993 (
Composed of unglazed tiles, other unglazed tiles and glazed tiles)worth US$ 11. 2 million.
In 1995, the volume of transactions increased by 7.
1% to 32,111 tons.
However, it fell by 7 in 1997.
7% to 28,452 tons. When the U. S.
Indonesian tile makers have found the dollar hit a record high of 10,000 rupees, encouraging them to increase exports.
In the export market, a box of tiles is sold for $2
3, compared to only Rp 15,000-25,000.
The first four months (January-April)
According to the Central Bureau of Statistics, China\'s exports reached 13,815 tons in 1998, worth $4. 6 million. Table -
5 Indonesian tile exports, 1993-1998 (*)January -
April Source: CBS/Data Consulting USA is the main destination in the global market, Indonesian tile products must compete with products from advanced countries.
In the European market, for example, they must compete with ceramic tile products from Italian, Spanish and local producers.
So far, Indonesia has exported tiles to many countries, including the United States, which is the most important destination.
For example, in 1997, Indonesia exported 28,452 tons of ceramic tiles, including 13,287 tons and 46 tons.
7% people went to the United States.
Singapore is the second largest importer of Indonesian tiles.
In the same year, Indonesia provided Singapore with 4,982 tons of crude oil worth $2. 6 million.
Other countries have a relatively small share of Indonesia\'s total ceramic tile imports. Table -
1997 tile exports to Indonesia in the month, from the National ofdestination Source: CBS/data consulting imports are still high, although Indonesia exports ceramic floor tiles, the company produces such products in large quantities to meet domestic demand.
In 1993, for example, Indonesia imported 21,997 tons worth $7. 5 million.
As real estate and office buildings flourish, the number of these imported goods has also grown rapidly over the next few years.
Reached 54,092 tons in 1996 (worth US$ 20. 9 million).
Due to the currency crisis, although Indonesia\'s imports of ceramic products remained at a high level of 41,957 tons, they fell sharply.
The first four months (January-April)
In 1998, according to the Central Bureau of Statistics, such imports amounted to 7,523 tons, valued at $2. 4 million. Table -
Indonesian tile import, 1993-1998 (*)January -
April Source: CBS/Data Consult other glazed tile Indonesia import most of tile is rectangular tile main its side more than 7 cm long.
Among the different types of tiles, the most popular one is the tile called \"other glazed brick cubes and similar items.
In 1997, Indonesia imported 41,957 tons of ceramic tiles, including 32,775 tons, accounting for 78.
1% belongs to this type.
The second most important type is so-
Other unglazed tiles
\"In the same year, Indonesia imported 7,851 tons of such tiles (
Worth more than $4 million). Table -
8 Indonesia\'s 1997 tile imports by type: CBS/Data consulting investor interest
The long term currency crisis seems to have had an impact on investors\' interest in the tile industry.
According to a copy of the Investment Coordination Committee (BKPM)
In the past 10 months, no investors have been interested in the industry, while in the period from 1997, at least 19 new projects and expansion projects in the same industry have been approved.
In fact, the number of ceramic tile producers currently put into production is quite large, resulting in them having to operate under the condition of insufficient installed capacity and facing fierce market competition.
The distribution and marketing of each tile floor/wall brick producer adopts the same model of domestic distribution and marketing.
They sell their products directly to the terminal.
Services are provided indirectly to users through distributors, agents and retailers.
When they serve, they do direct sales.
Buyers of scale like developers in office buildings, real estate, hotels and shopping centers who use distributors, agents or retailers as small-and medium-scale buyers.
Certain producers leave all of their distribution and marketing activities to distributors.
An example is PT Senrico Djaja MarmerIndustries, which sells tile products under the brand \"Super Italia.
PT Senrico uses its sole distributor PT Sumber cipeta Keramika Utamaas to oversee all domestic distributors of \"Super Italia\" tiles.
PT Sumber cipita kerautama, based in Jakarta, distributes \"super Italian\" tiles to all retailers in the Jabotabek region (Jakarta-Bogor-Tanggerang-Bekasi).
It has a big market target.
Development of scaleproperty projects for real estate, stations, office buildings, shops
House and apartment building.
Another tile producer is PT Mulia Keramic Indahraya, which trusts dealers in all its distribution and marketing activities and uses PT Catur Aditya Sentosa as its sole distributor, if its \"Mulia Keramic\" product is used in the Jabotabek region.
In the meantime, PT Metropole distributes its \"Roman\" and \"royal\" tiles using PT Satya Langgeng Sentosa.
Prices are still unstable compared to wall tiles and the demand for floor tiles is higher as they are not only consumed in large quantities
The size of the property project, but also by simple houses, very simple houses, and individuals.
Since the currency crisis began in the middle
1997, the consumption of floor tiles in the real estate and office buildings sector has changed from conventional products to granito and marble products.
Tile producers are more dependent on individual consumers (i. e. houseowners)than on large-
Expand the scale of real estate projects to consume their products.
According to some information, since the value of therupiah is still unstable, the price of tiles on the domestic market is still fluctuating.
At the same time, the pricing of ceramic tile manufacturers is based on production costs and distribution costs.
Finally, the price of the tile is different depending on the size, color, design and strength.
Usually, dealers get 10%
The producer gives a 20% discount and the dealer or retailer sets the profit margin to 15%-
20% of purchase price
Retail price of tiles, that is, the price that must be paid in the end
Users, including 10% VAT.
Therefore, ceramic tiles
Users must pay 151% of the price set by the producer.
There are three quality categories of tiles on the market, they are: first quality (spotless); second quality(defective);
Third quality (
Defective in shape and design).
Produced by PTSenrico Djaja Marmer Industries and sold through its distributor PTSumber cipeta Keramika Utama \"super Italian\" tiles for 22,500 Rp per square meter
Truck at Jabotabek project site;
OFT/tiles that have been fired)
In such a type, the quality is the first, the size is 32 cm point ¯ x 32 cm mm with Rp 26,000 in such a G type, and the size is 20 cm point ¯ x 20 cm.
Meanwhile, PT Satya Langgeng in Sentosa--
Exclusive distributor of PTMetropole Megah producing \"Rome\" and \"royal\" tiles--
Sold Rp 25,500 suffridge 22103 per square meter, size 20 cm x 20 cm, Rp-27, size 500 cm in the case of 30 cm x 30 cm, in the case of 42,500x33 cm, rp 33 cm. Table -
9 The Price of ceramic tiles for several brands, August 1998 Source: Data Consulting domestic consumption dropped by 12.
8% on 1997, the national consumption figures of ceramic tiles were obtained using the following formula: national consumption = production + import-
Export, assuming that domestic production in a certain year is fully consumed in the same year.
Domestic ceramic tile consumption was estimated at 114 in 1993.
1 million square meters, of which 16% to 0. 152 billion square meters in 1995.
In 1996, although domestic ceramic tile consumption grew lower than in previous years, it is still growing. e. by only 5%.
One of the main reasons for this is that with the increasing production capacity of the ceramic tile industry, domestic supply is already high.
After the mid-term outbreak
1997 of the money crisis, the construction industry (
Companies engaged in the development of real estate, real estate and other construction projects)
The economy has been sluggish since then.
Therefore, in practice, ceramic tile producers now rely on the retail market of homeowners to consume their products.
However, with the decline in purchasing power, the ability of this segment to absorb tiles has also declined.
In 1997, the domestic ceramic tile consumption is estimated to reach 140.
2 million, down 12.
Up 8% from last year. Table -
Indonesian tile consumption estimates, 1993-
1997 Source: Data consulted prospects due to the long-term monetary and economic crisis that began in the medium term
1997, the domestic demand for ceramic tiles has been declining.
In 1998, with the collapse of the construction sector and the decline in the purchasing power of the people, it is expected that this number will decline faster, that is, by 30%.
The current economic difficulties make it difficult to predict the future of Indonesia\'s economy.
The same crisis affected all aspects of national life, including political aspects.
However, recent currency developments suggest that the rupee is starting to strengthen against the dollar. S.
The dollar provides a good reason to hope that the construction industry will return to normal in 2000.
Basically, Indonesia is a developing country with great potential for the domestic market to absorb building materials including ceramic tiles.
In view of this, many investors have a strong interest in entering the Indonesian ceramic tile industry.
In addition, foreign ceramic tile suppliers continue to pay attention to the Indonesian market.
So far, few Indonesian ceramic tile producers have begun to adapt to the export market.
With the sharp depreciation of the Indonesian rupiah against the United StatesS.
In theory, Indonesia has a good opportunity to increase its share of the international ceramic tile market.
However, the competition in the export market is particularly high.
The quality is already very difficult.
International market segments for medium-sized enterprisesto-
The quality of ceramic tiles in Indonesia is not high, and there must be fierce competition with other developing countries, especially China.
Another problem facing the Indonesian tile industry is that glass and coloring materials still have to be purchased mainly from imported sources.
In addition, a large number of basic materials found in Indonesia are usually not available
In addition, the supply of Indonesian nationals skilled in ceramic tile production technology is also limited.