Nine Chinese footwear manufacturing companies have relocated to East Java involving a total investment of up to US$80 million. Eddy Widjanarko, chairman of the Indonesian Footwear Association (Aprisindo) said that the relocations were designed to avoid antidumping duties of 25% imposed by the European Union on footwear products from China and Vietnam.

He added that the new investments would create at least 20,000 new jobs. Fifteen other foreign investors are due to visit Indonesia in July to seek potential business partners.

According to Nugraha Sukmajaya, Industry Ministry, a further incentive for foreign companies to chose Indonesia was the EU’s relaxation of tariff barriers to Indonesian-made footwear products. In addition, the import duty was recently cut from 17% to 14%.

Sukmajaya believes that the arrival of the Chinese investors would help increase the country’s footwear exports. The government has set a target to raise the value of footwear exports by 20% from $1.5 billion in 2005 to US$2 billion in 2006.