Shoemakers lacking raw materials

JAKARTA (JP): The minister of industry and trade, Tunky Ariwibowo, said Saturday a lack of raw materials was still a major problem for the footwear industry.

"The longtime problem of the national footwear industry is the fact that there isn't any integrated upstream industry to support it," Tunky said.

He said Indonesian shoe makers imported 60 percent of their leather materials, 70 percent of their accessories and 100 percent of their chemicals and shoe heels. All of these products carry 30 percent import duties.

Tunky said export opportunities were still promising but that Indonesia could only supply 5.42 percent of the US$40 billion world market.

The minister said Indonesian shoes were not very competitive because of high production costs.

Tunky said the world's buyers now turned to Indonesia for mid and upper range shoes with factory prices of between US$12 and $14 a pair, while mid and lower quality shoes were coming from China and Vietnam.

"The shoe industry should work harder to take opportunities," he was quoted by Antara as saying.

Tunky said the government had lobbied foreign businessmen who had invested successfully in Indonesia to promote investment in footwear industry.

"If only ministers promote the industry, businessmen won't be convinced," he said.

Indonesian shoe exports were worth $2.1 billion in 1996 and the industry is growing about 13 percent a year.

Seventy three percent of shoes exported shoes are sports shoes -- 40 percent are Nike, 15 percent Adidas, 20 percent Reebok and the remaining 15 percent Fila.

The country's shoe exports are projected to reach $2.5 billion this year and $3 billion next year. (jsk)