South Korean, Vietnamese and Chinese shoemakers are reported to be planning to set up shop in Indonesia, boosting an industry that already makes some $400 million in export earnings.
"All the companies have already obtained principle licenses from the Investment Coordinating Board," Eddy Widjanarko, chairman of the Indonesian Shoemakers Association, told reporters at the Ministry of Industry.
Three unnamed South Korean firms are set to invest $200 million in Indonesia, with two planning to build new factories and the third to expand output of Adidas shoes at an existing site.
Two new factories are planned for Tangerang, Banten, and Surabaya, East Java, and the one set to undergo expansion is in Sukabumi, West Java, The Jakarta Post reported.
"They said they chose Indonesia because its (economy) was growing well," Widjanarko said.
The three South Korean companies will reach full production capacity of up to 1.4 million pairs of shoes per month between the end of this year and mid next year.
Indonesia has two other factories producing shoes for Adidas, the world's second-largest sports apparel company, both with monthly outputs of 600,000 pairs of shoes.
The association chairman told Bisnis Indonesia that three Vietnamese companies will invest in the shoe making industry in Indonesia this year.
The two companies will add 900,000 pairs to the country's monthly production and sales, he said.
And, he said, at least 20 Chinese shoemakers are also looking to open factories in Indonesia to evade duties. "Those 20 companies are big, employing between 30,000 and 60,000 workers," he said.
"Taiwanese companies have also expressed their interests in investing in and developing a shoe hub in Indonesia."
The country's shoe industry has been on the rise since the European Union in 2006 began imposing anti-dumping duties on leather shoe imports from China and Vietnam as a way to protect European industries from low-priced imports.
The industry recorded shoe export revenue of more than $400 million in the first half of this year, 8.6% higher than the $396 million recorded at the same time last year.
Waterford in talks on move to Indonesia
Waterford Wedgwood Plc, the Irish crystal maker controlled by billionaire Tony O'Reilly, is in talks that may lead to a relocation of UK jobs to Indonesia as part of an effort to shift production to lower-cost nations, Bloomberg reported.
Dublin-based Waterford is holding discussions regarding its site in Stoke-on-Trent in central England, spokesman Michael Dennehy said by telephone, confirming a British Broadcasting Corp. report. About 250 jobs may be affected, the BBC said.