Indonesian footwear producers look to government for support
The Indonesian shoe industry is seeking government support to enhance its competitiveness, according to the secretary general of the Indonesian Footwear Association (Aprisindo), Djimanto. He said that a multitude of problems had left the sector unable to compete with producers from other countries, such as China and Vietnam.
The statement came amid reports that a number of shoe producers had closed due to the termination of supply contracts with foreign buyers. Most publicly, the giant US sports company Nike has ceased orders from PT Doson Indonesia – resulting in 30% of the workforce being laid off. It also prompted a massive demonstration, on November 19, by thousands of former workers seeking severance pay.
Reasons cited for the decline include rising production costs, high interest rate, government-level corruption, and the lower productivity of workers in Indonesia compared to China and Vietnam.
Despite ending its relationship with PT Doson, Nike Indonesia’s general manager Jeff DuMont said the company remains committed to Indonesia as part of its ‘global strategy’. However, chairman of Aprisindo, Herry Rumawatin, said in a statement that Nike had reduced orders from its Indonesian subcontractors by around 40% - an assertion that the company denies.
Mr. Djimanto said that government support was now being sought to boost the industry’s competitiveness. The Regent of Tangerang, Agus Djunara has also written to the Minister for Trade and Industry, Rini Suwandi, requesting that steps be taken to resolve the problem.
