Lampang ceramics in trouble
- By: Somsak Suksai in Lampang
- Published: 29/11/2008 at 12:00 AM
- Newspaper section: News
Rising fuel prices, economic recession could deliver blow to province's hopes of becoming the kiln of Asia,
The global economic recession could deliver a striking blow to the well-established ceramics business of Lampang and dash its hopes of becoming the kiln of Asia.
Lampang is unique for its ceramic production that has existed for over a century. Ceramic bowls bearing the hallmark rooster form the theme of Lampang's long history and today the northern province is the country's largest ceramics producer.
For nearly a decade, ceramic production has been a major force driving the local economy. The workers, especially women, have moved from agriculture to ceramic factories and make a good living from it.
However, the more than 200 ceramic factories in this town are likely to feel the effects of the global economic crunch.
The majority of ceramic factories in Lampang depend on exports which exceed three billion baht a year. But sales have dwindled since the first quarter of this year primarily because of the massive jump in fuel prices.
Narongkorn Ketpitayawatana, head of Lampang's industrial mineral mining association, said orders for clay, the basic material in ceramics, have dropped by 30%, foreshadowing imminent stagnation of the industry.
Although the effects have yet to be felt industry-wide, the local ceramics producers are trying to cope by, for example, going after retail orders more to avoid producing in large lots, finding new markets, and taking a more aggressive approach in sales promotion.
Although petrol prices have now dropped, the ceramics industry remains under pressure as the price of liquefied petroleum gas (LPG) is soaring. LPG is the main fuel for the kilns.
Anurak Napawan, managing director of Indra Ceramic Co, a major Lampang ceramic exporter, said the cost of producing ceramics has nearly doubled as the LPG price has jumped from seven baht to 18.21 baht a kilogramme.
He expects LPG to cost even more and predicts that over 90 ceramic factories with limited production capacity are likely to shut down in the near future.
The operators are urging the government to put a lid on the LPG price and install an LPG pipeline to the North to save on transportation which would help bring the gas price down.
He said the pipeline should halve the LPG price. He noted, however, that the pipeline is expensive to build with the price tag exceeding 20 billion baht.
Sompong Polcharoenjit, an executive of SPP Ceramics Co, said each month the LPG bill runs into millions of baht for many ceramic producers and their financial well is drying up fast.
However, Athiphumi Kamtornwarin of the Federation of Thai Industries' Lampang branch, is still upbeat with a dream to develop Lampang as the largest ceramics centre in Asia.
He said ceramic orders, which mainly came from the United States and Europe, should return next year.
Lampang ceramic producers can compete easily with other Asian markets although China churns out cheaper supplies, he said.
Japan is another major ceramics manufacturer although its products are on the higher end.
Mr Athiphumi attributed Lampang's ceramic competitiveness to the richness of the white clay deposits and quality workmanship.
Suthep Tantiveerasut, director of the Ceramic Industry Development Centre, said the ceramics industry in Lampang still had a bright future because of high demand for ceramics from businesses such as spas and tableware makers.
There are also increasing orders from the Middle East.
The demand leads him to believe the ceramics industry and its workforce of over 10,000 in Lampang should survive the global economic recession.
Lampang Ceramic Association president Supranee Siri-apanont said ceramics orders from the US remained healthy and there was also high demand for ceramic floor tiles from neighbouring countries.
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