Shoe producers blame govt for their inefficiency<\/p>\n
JAKARTA (JP): Indonesian shoe producers have blamed the
\ngovernment for their production inefficiency and uncompetitive
\nproducts.<\/p>\n
They said the government had failed to create a business
\natmosphere that could support the sector's growth and increase
\nits competitiveness on a global level.<\/p>\n
Chairman of the Indonesian Footwear Association (Aprisindo),
\nAnton J. Supit, over the weekend asked the government to set up a
\nspecial board to smooth out all export-related matters to solve
\nthe efficiency and investment problem.<\/p>\n
He said lack of coordination between government offices made
\nit difficult for exporters to maximize their earnings.<\/p>\n
He said the government's recent decision to increase the
\nminimum wage was an example.<\/p>\n
\"The Ministry of Trade and Industry sets our (export) target,
\nbut the Ministry of Manpower suddenly pushes up wages while the
\nMinistry of Finance does not provide any breakthroughs. This
\nmakes it practically impossible for us to reach target,\" he said.<\/p>\n
Anton, who was accompanied by Aprisindo Secretary General Edi
\nWidjanarko and Secretary Then Ngim Fu, said the footwear
\nmanufacturing industry had very bright prospects.<\/p>\n
\"It would be a pity not to grab an opportunity like that,\" he
\nsaid.<\/p>\n
From the world's footwear export market worth US$45 billion
\nlast year, Indonesia managed to contribute only $2.1 billion, or
\nless than 5 percent of the world's exports.<\/p>\n
Anton said he was convinced Indonesia could increase its
\ncontribution to the export market to 10 percent before the ASEAN
\nFree Trade Area (AFTA) in 2003.<\/p>\n
He said Indonesia's small share in the export market was
\ncaused by the low competitiveness of Indonesian footwear
\nmanufacturers.<\/p>\n
\"This, in turn, is caused by the poor condition of the
\nsupporting industries that provide raw material supplies,\" he
\nsaid.<\/p>\n
Anton said the situation was worse with the development of new
\ncompetitors in the region, such as Vietnam and China. Both
\ncountries, he said, had attractive investment policies and a
\ncompetitive business climate.<\/p>\n
Anton said about 60 percent of the raw material used in
\nIndonesia's footwear industry was imported, particularly from
\nSouth Korea and Taiwan.<\/p>\n
\"So although our footwear exports each year continue to
\nincrease, it is always followed by an increase in raw material
\nimports,\" he said.<\/p>\n
He insisted that if more raw material components were produced
\ndomestically, footwear manufacturers would stop getting their
\nsupplies from overseas.<\/p>\n
\"Even if the imports and domestic products have the same
\nprice, we would opt for local products. But currently imports are
\nmuch cheaper, so we have no choice,\" he said.<\/p>\n
Minister of Trade and Industry Tunky Ariwibowo said last week
\nthat leather product exports, which included shoes, rose 4.6
\npercent last year to $2.4 billion. Leather products are among the
\n10 leading export commodities stipulated by the government.<\/p>\n
Anton said the proposed establishment of a special \"export
\nplanning board\" consisting of government officials and
\nbusinessmen could eliminate all the red tape barriers that
\nobstructed the flow of exports.<\/p>\n
\"If necessary, this board should restructure the whole
\nindustry... A revolution is needed to strengthen it,\" he added.<\/p>\n
He suggested the government provide incentives to
\nmanufacturers who efficiently use raw material.<\/p>\n
Currently imports of raw material for export-oriented footwear
\nproducers may get import duty and value-added tax drawbacks
\nthrough the Export Service Facilitating Agency.<\/p>\n
Any raw material leftovers must be reported to the agency to
\nhave their import duty drawbacks paid.<\/p>\n
\"But most of the time, the leftovers are a result efficiency
\nrather than miscalculations on the part of the manufacturer,\"
\nAnton said.<\/p>\n
He said the government should reward this by exempting
\nmanufacturers from paying the drawbacks.<\/p>\n
Aprisindo currently consists of more than 200 footwear
\nmanufacturing companies and is dominated by producers of sports
\nshoes.<\/p>\n
About 70 percent of Indonesia's sport shoe exports consist of
\nfour international brand names: Nike, Fila, Reebok and Adidas.<\/p>\n
Aprisindo is scheduled to have its national convention, on
\nApril 16, opened here by Minister of Industry and Trade Tunky
\nAriwibowo. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/shoe-producers-blame-govt-for-their-inefficiency-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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