Indonesian Tanners Association (APKI) secretary-general Lany Sulaiman said in Jakarta last month that the government should impose high export duties to reduce raw leather exports and, if necessary, totally ban exports to secure a sufficient supply for the local downstream tanning industry.
“Due to the shortage of raw leather, our actual production capacity continues to fall far short of its installed capacity," Lany told reporters at a press conference recently.
According to Lany, local tanners produced 35 million square feet of goat and sheep leather last year, or 35 percent of the estimated maximum capacity of 100 million square feet, while total cow hide leather output was 2.4 million square feet, or 48 percent of the estimated maximum capacity of 5 million square feet.Local production of leather goods has been partially supported by raw leather imports.
Indonesia, widely known for producing premium cow leather, exports 40,618 kilograms of raw pickled leather, 1.65 million square feet of cow-based wet blue leather, 12 million square feet of cow crust leather and 612,900 square feet of sheep and goat-based wet blue leather.
The raw leather shortage has been worsened by complicated import procedures that have left local tanners with about a 3-month supply at best, Lany said.
She said that the government should relax import procedures while raw leather stocks were limited. "We demand that the government extend permission to import from six months to one year, because the period is too short."
The government currently allows leather imports from countries that have been declared free of foot and mouth disease, including Malaysia, Australia, Canada, several Western European countries, and the US.
Import permits are issued after approval is issued by the Agriculture Ministry's quarantine agency, which has the authority to determine the safety status of the leather.
Indonesian Footwear Producers Association (Aprisindo) backed APKI's proposal, with a representative saying the raw leather supply shortage might harm the local footwear industry, as 20 percent of total non-sports production used leather.
“The government should stop exporting wet blue and raw leather to secure a supply for the domestic industry. There's a huge local market that we can fill on our own," Aprisindo chairman Eddy Widjanarko said.
Eddy said that the government should also ease import procedures for raw leather to boost the downstream industry and help local producers compete against imported finished products.
Indonesia, the world's third largest footwear maker, exported US$3.53 billion of footwear last year, up by 7 percent from a year earlier.
This year, the footwear industry has eyed a production increase of between 7 percent and 10 percent of the total export figure generated last year based on demand from major buyers, particularly those in the European Union and the US.
Source: The Jakarta Post