The government, through Minister of Finance Sri Mulyani Indrawati, has issued an Anti-Dumping Duty (“BMAD”) policy on imported ceramic tile products from China. This policy is outlined in the Minister of Finance Regulation (“PMK”) Number 70 of 2024, effective as of October 14, 2024, and will be enforced for the next five years. The BMAD rates vary across 32 companies from China, ranging from IDR 13,446 to IDR 94,544 per square meter, depending on each company. The objective of this policy is to curb dumping practices and protect the local ceramic industry, which has been struggling to compete with cheaper imported products.
Despite BMAD rates ranging between 35% and 50%, it is anticipated that these rates may eventually align with those in other countries, where anti-dumping duties can exceed 100%. This measure is expected to offer critical relief to the national ceramic sector, allowing local manufacturers to recover and regain their competitive footing, especially as numerous factories have reported declining output, with some halting operations entirely.
In addition to BMAD, the government has also issued a mandatory Indonesian National Standard (“SNI”) policy as set out in Minister of Industry Regulation No. 36 of 2024. This policy is aimed at bolstering domestic production capacity, which currently stands at approximately 63%. With mandatory SNI implementation, national production capacity utilization is projected to rise to 67%-68% by the end of 2024. The Association of Indonesian Ceramics (Asaki) further targets a utilization rate of 80% by 2025 and 90% by 2026.
Indonesia holds immense potential in the ceramic industry, boasting an installed capacity of 675 million square meters annually, placing it fourth globally after China, India, and Brazil. However, in terms of actual production, Indonesia ranks eighth. This policy seeks to elevate Indonesia to a position among the top five ceramic producers worldwide by 2025, as noted by Ceramic World Review.
Furthermore, Indonesia’s per capita ceramic consumption remains relatively low at under 2.5 square meters per person, which is below the global average. This underscores significant potential for growth in domestic demand, driven by rising consumer interest and large-scale infrastructure development.
The dual implementation of BMAD and mandatory SNI is expected to attract substantial investments, both from domestic stakeholders and international players, including Chinese investors. Local ceramic manufacturers are positioning themselves to compete fairly by focusing on innovation and operational efficiency. Additionally, the projected increase in demand for building materials, supported by the Prabowo-Gibran administration’s ambitious plan to construct 3 million housing units, presents a significant opportunity for the ceramic sector. This demand will encompass key building materials such as ceramic tiles, roofing tiles, and sanitary ware.
By safeguarding the local industry from underpriced imports, these initiatives not only strengthen the competitiveness of Indonesian ceramics in the global market but also encourage ongoing improvements in product quality. With the combined support of BMAD, mandatory SNI, and increased market opportunities, Indonesia is well-positioned to secure self-sufficiency in ceramics while advancing its standing as a major player in the global ceramic industry.
If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of many corporate law firms in Indonesia that has handled numerous similar matters, with many experienced and professional corporate and civil lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.
Author:
Dewi Susanti