Be aware that there are scammers active on WA pretending to be Indonesia Investments
11 April 2025 (closed)
Jakarta Composite Index (6,262.23) +8.20 +0.13%
Coping with an Exacerbating Global Trade War: the Ceramics Industry of Indonesia
The ceramics industry is an important one for the Indonesian economy, and is one that has significant potential as per capita ceramic consumption is still low in Indonesia. Due to widespread (near) poverty in society, there is ample room for future growth of ceramic tiles (for walls and floors), porcelain, stoneware, bricks and more.
However, Indonesia's ceramics industry has been facing some big challenges, such as fierce competition from other Asian markets (such as China and Vietnam) and relatively high operational costs (typically linked to the high gas price). A structural problem is that amid the weaker competitiveness of Indonesian ceramics manufacturers, (cheaper) imports from countries like China are a popular alternative.
Meanwhile, the exacerbating trade war that was triggered by US President Donald Trump's high import tariffs also presents a major challenge for Indonesia's ceramics industry. Rudy Sujanto, Chief Financial Officer at Arwana Citramulia, said the threat is that big ceramics-producing countries like Vietnam and India will be discouraged to export ceramics to the United States due to high US import tariffs, and instead will seek other markets for their products.
Indonesia could be one of those markets. After all, there is wide room for growth of ceramic sales in Indonesia, driven by increased construction spending, rapid growth in the housing sector, urbanization and population growth. What is an interesting cultural trait is that Indonesians generally prefer detached houses and favor ceramics for the perceived cleanliness.
Sujanto added that one of the strategies Indonesia can use to limit ceramic imports from countries such as Vietnam and India is by applying the Indonesian National Standard (Standar Nasional Indonesia, or SNI). SNI, which serves purposes related to consumer protection and quality assurance, can be considered a non-tariff barrier as it typically also sets mandatory requirements and testing procedures. This can easily be used as barriers to foreign imports.
Unfortunately, it is unlikely that Indonesia can boost ceramic exports to the United States as the latter is not a significant market for Indonesian ceramics, even though countries like Vietnam and China face higher US import tariffs than Indonesia does.
The biggest export markets for Indonesian ceramics are found in ASEAN, such as the Philippines, Thailand and Malaysia.
With an estimated annual installed production capacity of 675 million square meters, Indonesia ranks among the world's top producers of ceramic tiles. In terms of production capacity, Indonesia ranks fourth (after China, India and Brazil). However, in terms of actual production, Indonesia ranks eighth.
Subscribe to our monthly reports (electronic reports, PDFs, in English). Contact us through email and/or WhatsApp:
- info@indonesia-investments.com
- +62(0)882.9875.1125
Take a glance inside the report here!
