Indonesian shoe makers invest $171 million

9 October 2008

Up to 25 local and foreign companies plan to invest a total of US$171.6 million in the Indonesian footwear industry this year, by building new plants and expanding existing ones, says the industry ministry.

Among them are foreign investors PT Parkland World Indonesia, PT Nikomas Gemilang and PT Ching Luh Indonesia, respectively planning to invest $51.9 million, $35 million and $16.78 million. Once realized, these projects are expected to absorb around 47,000 workers. Of the 25 companies, ten will expand existing capacities and the rest will set up new production facilities. Sixteen of the firms will focus on export markets. Budi Irmawan, the ministry's miscellaneous industry director, said that the planned investments were the result of ‘a good investment climate' which the country has managed to create for the sector. ‘Our labour costs are also more competitive than in Vietnam and China', he said. ‘In addition, we have abundant leather resources for raw material.' The shoe industry has been on the rise since2006 when the European Union imposed anti-dumping duties on leather shoe imports from China and Vietnam to protect European industries from low-priced imports, eventually boosting demand for shoes from Indonesia. Sharing a similar view, Eddy Widjanarko, Indonesian Footwear Producer Association (Aprisindo) chairman, said the country still offered a good climate for the footwear industry. He is upbeat that this year's footwear export target of $1.9 billion will be met. ‘I'm optimistic that we'll be able to meet the export growth target of 20% this year from $1.6 billion last year. The plans by the 25 companies mean we are one step closer to meeting that goal.' Source: The Jakarta Post

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