Monday, August 20, 2007

Doulton resumes expansion project

Monday, August 20, 2007
The Jakarta Post, Jakarta

British-based ceramic tile manufacturer PT Doulton Indonesia will go ahead with its US$30 million investment at its ceramic tile factory in Tangerang, Banten, after the government confirmed the project would get a gas supply.

"Thanks to Industry Minister Fahmi Idris for his support in allowing us to resolve the gas supply problem for our factory. We are very happy with the situation and will continue to invest in Indonesia," Narinder Arora, the president director of PT Doulton Indonesia told The Jakarta Post on Thursday.

The Royal Doulton Company through PT Doulton Indonesia, which has so far invested US$75 million in its Indonesian ceramic venture, had planned to increase its investment by US$30 million this year, but the plan was delayed due to a lack of gas.

Beny Wahjudi, the director general of agro-chemistry industries at the Industry Ministry, said that the shortage of gas to the ceramic industry had persisted since last year due to the delay in the building of a gas pipeline from Pagar Dewa in South Sumatra and Grissik in Jambi to Tangerang and Bekasi, both in West Java.

With the increase in the gas supply, PT Doulton Indonesia will be able to double its production capacity from the existing eight million ceramic tiles a year to 16 million.

To feed this capacity, the company will need an additional 85,000 cubic meter of gas per month. To date, the company has needed 630,000 cubic meter of gas per month.

PT Doulton Indonesia has operated its plant in Balaraja, Tangerang, since 1996. About 98 percent of the company's products are exported. In 2006, exports totaled $20.1 million, a slight rise from the $17.7 million recorded the previous year.

In December 2006, the company finished the first stage of its expansion by raising production from 5 million tiles to eight million, at a total investment of $2 million.

The company now plans to increase the number of its workers from 1,350 at present to about 2,000.

Earlier in the day, Narinder accompanied by Achmad Widjaya, chairman of the Indonesian Ceramic Industries Association (Asaki), met Industry Minister Fahmi Idris to thank the minister for his help in overcoming the gas supply shortage that has been badly affecting the industry over the past several months.

Achmad said Asaki members appreciated the efforts made by the minister to increase the gas supply so that some 20 ceramic tile manufacturers in Tangerang and Serang could resume production.

However, he also asked the government to pay special attention to the problem of gas transmission quality. "We are not talking about the supply only, but we are also talking about the pressure of the gas supply," he told the Post.

He said that the gas pressure needed by the ceramic industry was two bar at the minimum. However, since the end of 2005, many ceramic producers in West Java had been receiving a pressure of only gas one bar. The gas supply was also unreliable, he said.

Indonesia is now the world's fifth-biggest ceramic tile producer.(02)

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