Shoe makers may have to suspend operation
Shoe makers may have to suspend operation
Sari P. Setiogi, The Jakarta Post, Jakarta
A number of leather shoe producers may be forced to suspend
operations due to a shortage of leather, caused by a move taken
by the government on Oct. 5 to ban leather imports from China.
"About 13 manufacturers are highly dependent on leather
imports from China. If the ban continues, production might have
to be suspended," secretary-general of the Indonesian Footwear
Association (Aprisindo), Yudhi Komarudin, told The Jakarta Post
on Monday.
Most of the manufacturers are located in the Greater Jakarta
Area and East Java, while about 24,000 workers are employed in
the sector.
About 60 percent of imported leather used by the industry here
is from China, said Yudhi.
The Ministry of Agriculture has placed an indefinite ban on
leather imports from China over concerns about foot and mouth
disease, as China has not issued a country report on the disease
for years.
As a result, many of the imported leather materials are being
held at the customs and excise office, Yudhi said.
The ministry temporarily lifted the ban in mid October, but
only one shipment per importer for the next three months.
"The shoe industry cannot operate like that. We cannot stock
leather for the coming months as orders might vary in pattern and
color. If we do so, we may suffer losses," said Yudhi.
He also said the three-month policy was irrational, "What will
happen in the following months?".
Yudhi said some foreign buyers might also cancel their orders
if the situation continued. "In the shoe industry, if a buyer
orders shoes made from leather from China, then it could not be
exchanged with leather from another country."
He was worried the government policy could affect the leather
shoe exports from Indonesia.
Earlier, chairman of the association, Anton Supit, predicted
this year's footwear export value would drop to below US$1
billion due to various factors including security and labor
issues, as well as rising production costs here.
In 2002, shoe exports reached about $1.2 billion, decreasing
from $1.6 billion in 2001 and $2 billion in 2000.
About 40 percent of Indonesian footwear exports go to the
United States, 33 percent to Europe and the remainder to African,
Middle Eastern and South American countries.