Nike denies reducing shoe orders

Nike denies reducing shoe orders

Multa Fidrus, The Jakarta Post, Tangerang

Giant U.S. sports company Nike denies it has reduced its shoe
orders from Indonesia, saying that orders this year are stable
and will be similar to that of last year.

"Any statement indicating that Nike is significantly reducing
orders to Indonesia is incorrect," Nike Indonesia's General
Manager Jeff DuMont told The Jakarta Post on Thursday.

"Nike continues to value Indonesia as an important part of our
global strategy and we will continue to make efforts to support
the success of Nike contract factories and promote stability for
the Indonesian people employed in these factories."

He was commenting on the closure of PT Doson Indonesia due to
the U.S. company's decision to cease orders from the
subcontractor and a statement made by Herry Rumawatin, chairman
of the Indonesian Businessmen Association's (Apindo) Tangerang
branch office, that so far this year Nike had reduced its orders
from its Indonesian subcontractors by about 40 percent.

PT Doson closed its business in September after Nike stopped
its shoe orders from the firm.

Herry said the subcontractors had suffered financial
difficulties since Nike drastically dropped orders from the
companies and they had to fire up to 30 percent of their workers
to survive.

"We expect the order reduction will reach up to 50 percent
later this year," he said, adding that the companies had seen
difficulties since last year, and was compounded by the Bali bomb
attack on Oct. 12.

"In our recent meeting, several companies had also forwarded
plans to dismiss workers as an inevitable efficiency step, but I
have not confirmed again how many workers would be dismissed," he
said, adding the figure could be as high as 30 percent of total
workers at each company.

Data from the Tangerang regency's industry and trade agency
shows that the seven large shoe producers that depend on orders
from Nike were PT Pratama with 3,060 workers in Serpong, PT
Starwin with 2,613 workers in Cikupa, PT ADI with 1,597 workers
in Balaraja, PT Karet Murni with 3,015 workers in Curug, PT
Nagasakti with 4,761 workers in Pasar Kemis, PT KMK Global with
9,378 workers in Cikupa and PT Hardaya Aneka Shoes Industry
(HASI) in Jatiuwung with 5,600 workers.

But DuMont said that Nike was committed to maintaining orders
from Indonesia. "Our commitment is demonstrated by our ongoing
work with 47 contract footwear, apparel and equipment contract
factory groups in Indonesia, which employ over 120,000 people.
While business reality and global conditions do impact our
business practices, Nike is looking forward to a positive future
in Indonesia," said Jeff Dumont.

In response to the declining orders, Tangerang regent Agus
Djunara had sent letters to Minister of Trade and Industry Rini
Suwandi, requesting the minister take the necessary steps to
resolve the problem.