Italy provides help for local shoe industry

Sari P. Setiogi, The Jakarta Post, Jakarta

For those who value leather shoes made from high quality Italian material as their first choice in footwear, but never imagined that Italian shoes could be made in Indonesia, well think again.

The Indonesian government and the Italian government signed a memorandum of understanding (MoU) on Thursday to set up a special center that would help boost the quality of locally made leather shoes to match Italian products.

The center is called the Indonesian Footwear Service Center (IFSC), located in Sidoarjo, East Java.

It will function as a training and resource center for aspiring local cobblers. In addition it will be a source for information, research and development in the shoe industry and a center for consultation. The center is expected to start operating later this year.

The Italian government has allocated a soft loan worth 10 billion lire (about US$4.56 million) to help finance the center. The loan carries an interest rate of 0.5 percent and a repayment period of 36 years.

The loan will be used to buy new machinery and to cover training expenses.

The Indonesian government promised to contribute Rp 10.35 billion ($1.15 million) for the purchase of land, furniture and the construction of the building.

Italy was chosen as a partner to develop the local shoe industry because of the former's strong reputation in producing high quality leather shoes.

"The (shoe industry) sector (here) is very promising. Indonesian leather shoes are actually very impressive, made with a high-level of skill and in very good taste," Ambassador of Italy to Indonesia Francesco M. Greco, told the media.

"In the next five to ten years, Indonesia can become a very tough, competitive country in leather shoes for Italy, so it will be better to build a strategic partnership with the country now, rather than having a possible competitor," smiled Greco.

He also said that Indonesian workers were actually skillful, although the local industry needed some help with technology and to be able to produce with Italian standards.

Greco expected that after years of training local cobblers, more Italian investors would put their money into the Indonesian shoe industry and more locally made products would be exported to Italy.

The value of Indonesia's shoe exports reached $1.29 million in 2002 with an average growth of 1.8 percent per annum.