U.S. economic slowdown hits RI shoe exports

U.S. economic slowdown hits RI shoe exports

JAKARTA (JP): The slowdown in the U.S. economy could pose a
major blow to Indonesia's shoe exports, which last year reached a
total of US$2 billion in value, according to the Association of
Indonesian Footwear Producers (Aprisindo).

The association's chairman, Anton J. Supit, announced on
Wednesday that exports started to decline last December due to
lower demand from the United States, the main buyer of
Indonesia's shoes.

He estimated that the lower demand from the United States
would cause a decline in the country's total shoe exports by at
least 10 percent to about $1.8 billion this year.

"In the current situation, it will be difficult for Indonesia
to achieve this year's target of $2.2 billion from shoe exports,"
Anton said.

According to him, the fall in demand from the United States
generally affected sports shoes of well-known brands such as
Adidas, Nike, Reebok, and Fila.

As more than 65 percent of the country's footwear exported to
the United States comprised of these types of sports shoes, a
decline in demand from the country will severely affect the local
shoe industry.

The United States is one of Indonesia's largest shoe importers
and buys about 35 percent of the country's footwear exports.
Europe takes 30 percent, while the rest goes to other parts of
the world.

Analysts have predicted that the contraction in the U.S.
economy could trigger a global economic downturn, which in turn
would also impact on Indonesia's exports.

However, last month, the Indonesian Minister of Trade and
Industry, Luhut Pandjaitan, played down the impact of the U.S.
economic slowdown, arguing that most of Indonesia's goods
exported to the country comprised primary consumption products
such as textiles, garments, and shoes.

If it happened, the impact of the U.S. economic slowdown would
be minimal, Luhut said.

According to Anton, Indonesian footwear exports to the United
States are not categorized as primary consumer products because
80 percent of them consist of sports shoes.

Separately, Djimanto, secretary-general of the association
said local shoe-makers should diversify their market in a bid to
minimize any impact from the U.S. economic slowdown.

Djimanto revealed the United States Agency for International
Development (USAID) had agreed, through its global market
network, to help association members market their products
worldwide.

"It's a good opportunity for us to net new buyers," he said.

However, Djimanto said political uncertainty and Indonesia's
high risk nation status remained the largest problems which could
hamper the effort.

"New buyers will favor orders from other footwear-producing
countries such as China, Thailand, or Vietnam which have
relatively stable political conditions, to ensure reliable
delivery, rather than Indonesia," Djimanto said.

Aprisindo currently has 91 active members, of which 50 are
considered large companies and produce high quality shoes for
brands such as Nike, Reebok, Fila, and Adidas. (03)