Shoemakers optimistic on export target
JAKARTA (JP): The Indonesian Footwear Association (Aprisindo) is optimistic in meeting its target of US$2 billion from exports this year with a surge expected after September.
Aprisindo secretary-general Djimanto said exports for the first six months of the year reached $631.2 million, up from $500 million during the same period in 1999.
"Exports will boom after September for Christmas, New Year, back-to-school trends and approaching the change of seasons," he told The Jakarta Post by phone.
Indonesia exported 57.4 million pairs of shoes in the first semester of 2000, compared to 100.81 million pairs throughout all of last year, Djimanto said, adding that export destinations include the United States, Australia, Japan, Africa, and Europe.
Djimanto warned success in meeting the target would depend largely on the stability of Indonesia's economic and political situation, as well as improved security and labor practices.
Shoe exports plunged during the height of the economic crises to $1.2 billion in 1998, from $1.6 billion in 1997 and a record of $2.2 billion in 1996. In 1999, exports recovered to $1.7 billion.
Aprisindo has 87 active members who produce top-line models such as Nike, Reebok, Fila and Adidas.
In spite of the booming exports, local producers are facing stiff competition from cheaper Chinese imports in the domestic market.
Djimanto said the industry in late 1999 was forced to cut down on production capacity by 20 percent from a maximum of 2.9 trillion pairs a year and laid off some 2,000 workers.
Djimanto downplayed the possibility of dumping practices by Chinese manufacturers, noting that Chinese shoes were also very competitive in international markets.
"Shoes made in China could be sold at 60 percent the normal wholesale price," he said.
Chinese-made shoes were cheaper because of lower labor costs, and because most of its raw materials were supplied locally, Djimanto said, adding that Chinese companies also enjoyed lower interest rates and a stabler currency.
Indonesian shoe producers, he added, still had to import 60 percent of their raw materials.
Djimanto, however, said that some of the cheap Chinese shoes could have been smuggled in by importers in collusion with customs officials.
"There are importers who claimed to import partly made shoes, when actually they were bringing in wholly made shoes, so the tax they had to pay would be lower.
"There are also officials who do not check documents or the contents of the containers used to bring the products in, but take for granted that everything is in order," Djimanto said. (10)