Thu, 10 Mar 2011

By Shirley Christie

Despite being the world’s third-largest exporter of shoes, Indonesia still wants to stamp out a bigger share of the market.

“There are many high-quality Indonesian shoes gaining recognition in both the domestic and international markets,” Trade Minister Mari Elka Pangestu told reporters during the inaugural Indonesian Shoe Day at trade ministry’s office on Wednesday.

But she said many Indonesian still believed otherwise.

“That’s why we must introduce and promote Indonesian shoes more aggressively,” she said.

Only China and Vietnam export more shoes than Indonesia, said Edi Widjanarko, the chairman of the Indonesian Footwear Association (Aprisindo). The archipelago is also the world’s fourth-largest exporter of leather shoes, after those two countries and India, he added.

“[The industry] has attracted a lot of investors. There are 17 new investors this year. Apparently [production] in China and Vietnam is slowing down, so investors are turning to Indonesia,” Edi said.

Last year, the export value of the footwear industry reached $2.6 billion, increasing 52 percent from $1.9 billion in 2009. Mari said it was the biggest increase the industry had ever experienced.

“Usually the annual increase is about $600 million, but we could reach $ 3.2 billion this year,” Edi said, adding that with strong support from the government, the export value could reach $5 billion within 3 years.

He said Indonesian shoes were exported to more than 140 countries.

Edi said that at least five local shoe companies this year had increased productivity or had started building new factories - most of which are located in Tangerang, followed by East Java and Bandung.

He estimated that one factory could invest around $70 million and employ as many as 10,000 workers.

“We could increase production capacity for export by 100 million pairs this year,” he said, adding that the value for that many shoes was about $1 billion. Indonesia’s current production capacity is 300 million pairs.

Mari said that while Indonesia’s export value for shoes was higher than for imports, the industry should focus on increasing quality in order to compete with global brands.

Deputy trade minister Mahendra Siregar said that Indonesian’s should buy local shoes not purely to support the industry, but rather simply because the quality was high.

“There will be a discussion between trade delegates from all provinces, the Indonesian Trade Promotion Center and Aprisindo so that they can understand more about developing and promoting the footwear industry in Indonesia,” he said.

Gunaryo, the directorate general for domestic trade at the Trade Ministry, said that it had set up a trading centers for small- to medium-enterprises in places like Mojokerto and Tanggulangin, East Java. He said they were currently managing 780 small businesses, from designers to cobblers and sewers.

The Trade Ministry is slated to open 15 outlets - called Aku Cinta Indonesia (I love Indonesia) or ACI - in Greater Jakarta dedicated to selling Indonesian products.