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)