Out of the ashes of the renowned tin mining industry in the Kinta Valley, the ceramic industry in Perak has emerged strongly. It was primed for success as large reserves of ball clay and kaolin were discovered in the Kinta Valley, Changkat Jong and Bruas. Capitalising on these discoveries, the Perak Government through its investment arm, State Development Corporation (SDC), established the Ceramic Park in Chepor, about 20 km north of Ipoh, in 1991. The cottage industry potters and small-scale kilns operating around Ipoh and along Jalan Kuala Kangsar were relocated to the Ceramic Park and foreign investors were attracted to participate in the industry to make it a leading sector. It was also to help the factories switch from producing low value products like earthenware and flower pots to manufacturing higher value-added items, such as technical products. And thus, a ceramic research centre was also planned at the 57ha Ceramic Park. However, various unexpected problems cropped up resulting in the ambitious project not reaching its full potential.
The problems faced by the ceramic factories range from shortage of workers to the escalating production costs. And to add to the plethora of woes, the quit rent for land in the Ceramic Park, where most of the factories are located, has been increased by 150 per cent. According to the chairman of Perak Ceramic Industry Association (PCIA), Mr. Tang Bun Cheu, 80 per cent of the factories making pottery in the country are located in Perak. These factories are badly affected by rising production costs and competition from cheap imports. The ceramic industry’s latest official sales figures available show that local sales account for RM640M and exports RM173M. Tang said the current economic slowdown had also affected the industry and these figures are about five percent less than those for the previous year. Meanwhile, imports of ceramic products have increased from RM116M to RM135M from previous year. He said about 80% of the produce was exported in the past, but it had reduced by 50% and the factories had to cut their production. The number of factories have since reduced from 60 to 40 over the last five years.
Shortage of Skilled Workers
Director of Sin Thai Pottery Sdn. Bhd., Mr. Tan Chiew Ping, said the main problem faced by the industry is labour shortage. On the average, each factory employs about 50 workers. As locals are not interested in the job, they have to depend on foreign workers. The work permit for a worker is limited to five years, after which he has to leave the country. While it takes about three to four years to train a worker. Tan said that the workers should be allowed to stay and work for longer periods so that their experience could be fully utilised and they could also train newcomers.
Shaping of the pots in the potter’s wheel is a skilled job. The wheel is used for trimming excess material and for applying incised decorations or rings of colour. The decorations are done manually. If a worker is too slow and the clay hardens, the pot has to be rejected. Therefore, the workers need time to learn the skills. He said the labour costs are more than 30% higher than those of competitors abroad. Other contributing factors to the escalating production costs of the ceramic industry are: fuel which has gone up by 63%; cost of electricity up by 26%; clay by 150% and the tax on imported chemicals increased between 10% to 30%. PCIA have had discussions with SDC repeatedly for the past ten years, requesting them to extend the existing natural gas line in the state to supply gas to Chepor and Bercham Industrial Estates, but has not been successful.
Government Intervention Needed
PCIA feels that since the government is promoting “Kempen Membeli Barangan Buatan Malaysia” (Buy Made-in-Malaysia Products Campaign), sales tax should be abolished to be competitive to the cheap imports especially from China, India, Thailand and Indonesia. It suggests that imports must be restricted to protect the industry. Chief executive officer of Celles International Sdn Bhd., Mr. Cae Hiew, whose company supplies fuel to the factories, said that the demand for fuel is decreasing due to the cuts on production.
He said that fuel costs could be reduced if coal is used, but the government does not permit this. Another way of reducing cost is using non conventional fuel which the government should allow. Assistant secretary of PCIA, Mr. Tang Chee Fook, worried that if there is no subsidy or intervention from the government, the factories would close down and it would be an end to the ceramic industry in the state which began as factories producing latex cups for the plantation industry about a century ago. The government needs to be proactive and get the stakeholders together and discuss how to protect the industry, before the factories close down and once closed, it would be impossible to revive. More damage to the economic stability of the Silver State. Something which can be averted with timely intervention from the state government.