Indonesian Shoemakers Fear Export Order Shifted to China

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Last updated at: (Beijing Time) Wednesday, June 12, 2002

Indonesian Shoemakers Fear Export Order Shifted to China

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Indonesian shoe manufacturers were worried that some multinational companies (MNCs) would cancel their orders and turn to their affiliations in China due to unfavorable investment climate in Indonesia, the Jakarta-based Bisnis Indonesia Daily reported Wednesday.

Secretary of the Indonesian Footwear Manufacturers Association (Aprisindo) Djimanto said that some MNCs have prepared to bring orders to China to meet the timeframe of initial contracts.

"We get increasingly worried that if the government continued to impose contraproductive policies, we would not be able to deliver shoes to buyers on time", Djimanto said.

The Indonesian government was less responsive in dealing with the problems faced by footwear industry and even issued some regulations that contravene business means, according to Djimanto.

He pointed to a ruling that obliged shoemakers to get a recommendation from the ministry of agriculture before importing processed leathers -- the main material for the industry.

He also complained about the hike on power tariff, oil fuel tariff and labor wages that raised cost of the production.

It was learnt that the government imposed strict rule on imported leathers, primarily those from South Korea, to prevent foot-and-mouth disease from entering Indonesia.

"Export orders that will possibly move to China worth some 300 million U.S. dollars", Djimanto claimed.

The association has projected cumulative export at 1.6 billion U.S. dollars this year but, under the current situation, Djimanto revised the figure to 1.3 billion U.S. dollars.

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