Major job losses at Indonesian tanneries

Indonesian Tanners Association (APKI) chairman Senjaya Herina is reported as saying that three large-scale firms and 60 small-scale home-based leather enterprises had fallen bankrupt or terminated operations due to falling demand, both in domestic and global markets. He said that production levels of tanners had declined significantly in the first quarter of this year.

‘In general, each company has suffered a decline in business orders of up to 40% in the first quarter compared to the same quarter last year,' he said.

Indonesian Footwear Association (Aprisindo) data shows that footwear exports declined by 3% to US$158.3 million in January this year, compared to $163.2 million in the same month last year. With the global downturn in demand, Senjaya said, large-scale and small-scale tanners had been forced to lay-off workers

‘There are at least 300 [laid-off] workers from the three [large] firms and another 900 workers from 60 home-scale enterprises,' he said, adding that the larger companies are located in Jakarta and Banten.

‘One of the larger (un-named) companies produced 80,000 ft2 of tanned leather every month (7,430m2), while the other two firms each produced 25,000ft2', he added.

He said the 60 home-based small enterprises affected were based in Garut, West Java, and Yogyakarta and Magetan in East Java. According to APKI, there are 70 medium/large scale tanners in Indonesia and a further 400 small-scale home-based ones. Indonesian tanners had a total production of 150 million ft2 of tanned buffalo, sheep and goat leathers per annum of which 25% is exported, even though they cannot meet the annual demand for the domestic market, which totals almost 250 million ft2.

Tanners, he said, were also lobbying the government to open-up the market to wider sources of raw and semi-processed leather from Myanmar, Brunei and Africa to boost production to meet local demand.

Senjaya Herina said that, as the government had issued policies supporting the consumption of locally made products, he expected sales (of tanned hides and skins) would reach ‘at least Rp1.8 trillion ($167.44 million) by the end of this year - the same as that of last year.'

Source: The Jakarta Post, Jakarta