Shoe association renews call for govt help<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
The footwear producers' association has renewed calls for the
\ngovernment to help the industry, warning of more bankruptcies
\nnext year unless concrete measures were taken to boost its
\ncompetitiveness.<\/p>\n
Djimanto, secretary genereal of the Indonesian Footwear
\nAssociation (Aprisindo), said the industry was facing a host of
\nproblems that left it unable to compete with producers from other
\ncountries, such as China and Vietnam.<\/p>\n
\"The price of Indonesia-made products are 10 percent higher
\nthan those produced in China and Vietnam. How can we compete with
\nthem?\" Djimanto told The Jakarta Post on Thursday.<\/p>\n
He made the statement amid reports of the closure of several
\nshoe producers due to the termination of their supply contracts
\nwith foreign buyers.<\/p>\n
Public awareness about the plight of the industry has been
\nheightened following a massive rally by thousands of workers from
\nPT Doson Indonesia on Tuesday. The workers demanded severance pay
\nfrom the South Korean company, which claimed it had been forced
\nto close down its operation due to the ending of its supply
\ncontract with U.S. shoe producer Nike Inc.<\/p>\n
Djimanto's statement also came against the background of the
\ngovernment's plan to provide a Rp 10.5 trillion financial
\nstimulus to help kick start the country's economy next year. The
\nstimulus would be allocated for infrastructural development,
\nwhich would be labor intensive.<\/p>\n
Djimanto said the industry was not seeking a cut of the
\nfinancial stimulus package.<\/p>\n
\"The package is good for our economy but our main concern now
\nis government support to boost our competitiveness,\" Djimanto
\nexplained.<\/p>\n
He said the industry has lost its competitiveness due to
\nrising production costs over the past three years, caused by,
\namong other things, the increases in electricity, fuel and salary
\ncosts.<\/p>\n
High interest rates and rampant illegal fees collected by
\ncorrupt officials also contributed to the high cost environment,
\nhe said.<\/p>\n
Workers in China and Vietnam were also more productive as they
\ncould produce three to four shoes every day compared to only in
\nIndonesia, he said.<\/p>\n
This had led to many foreign buyers shifting their orders to
\nsuch countries, he said, adding that new buyers were also afraid
\nto place orders here over fears about certainty of delivery.<\/p>\n
Djimanto said that about 100 local footwear firms had stopped
\noperating in the last three years, reducing the number of
\nAprisindo members to 95.<\/p>\n
He predicted that the country's footwear exports would decline
\nto US$1.4 billion this year, from $1.6 billion last year.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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