Shoe exports may drop 50% this year: Aprisindo

Shoe exports may drop 50% this year: Aprisindo

JAKARTA (JP): A continuing decline in orders fueled by worries
about the situation here may drive down the country's shoe
exports by nearly 50 percent this year, an executive of the shoe
industry has warned.

The chairman of the Indonesian Footwear Association
(Aprisindo), Anton J. Supit, said Monday the drop in shoe exports
would cut the country's foreign exchange earnings from the
industry to about US$1 billion this year from $1.9 billion in
1997.

Anton said the orders had dropped significantly in the last
several months as usual buyers of Indonesian-made shoes feared
political uncertainty in the country would affect local shoe
production and delivery.

"It is ironic that, when our products are 20 percent cheaper
than China's, our greatest competitor, we cannot use the
opportunity," Anton said on the sidelines of a seminar.

He said buyers also worried that the economic situation would
make it hard for Indonesian producers to obtain letters of
credits to buy their raw materials.

"Shoes are fashion and seasonal goods. If they are delivered
late, there would be no use of them."

Buyers place orders three months before the delivery date.

Regular orders for Indonesia had gone instead to China and
Vietnam, he said.

The country's producers of four major shoe companies, Nike,
Reebok, Villa and Adidas, recorded an average 50 percent fall in
their subcontract orders, he said.

Supplies for the four major shoe lines make up 72 percent of
the total shoes exports.

Anton said only 50 percent of the production capacity in shoe
factories was currently being used."

"There are only three million pairs of shoes produced in the
country monthly now, compared to seven million pairs normally."

Anton said about half of the workers in the shoe industry had
lost their jobs as their companies drastically cut production.

For example, a factory with 14 lines which usually produced
800,000 pairs of shoes now could only produce 100,000 pairs.

About 500,000 workers in the sector had been reduced to about
250,000 because of the slow down.

Anton said there were thousands of shoe factories in the
country -- including small ones -- and 170 members of Aprisindo
which mostly produced sports shoes.

Shoe orders began to decline after massive riots broke out in
May. (das)