Indonesia's footwear industry expects more investment

21:43, August 27, 2010      

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Indonesia's footwear industry is gearing up for more investment as the country has a large labor force which has made it a new emerging hot spot for foreign direct investment, the Jakarta Post daily reported Friday.

The Indonesian Footwear Association (Aprisindo) said that given recent global and domestic investment trends, it expected that by the end of 2011, Indonesia could attract at least 20 major footwear companies to relocate their factories to Indonesia.

"Indonesia is now a very attractive investment destination. With improved infrastructure, I believe that we can invite at least 20 big footwear companies by 2011," Aprisindo's Advisory Council Chairman Haryanto said.

Investment Coordinating Board (BKPM) chairman Gita Wirjawan said "I believe we can achieve the target of total export revenue of 2.1 billion because most branded footwear factories, making New Balance, Mizuno, Adidas, Nike and Reebok shoes, export their products," he said.

He added that he was optimistic Indonesia could produce up to 300 million pairs of shoes this year.

The golden era of Indonesia's footwear industry dates back to before the 1998 financial crisis. Aprisindo claims the country's export revenue then reached 2.4 billion U.S. Dollars per year. The industry also employed up to 800,000 workers.

Following the 1998 crisis, the country's footwear export declined sharply. In 2004, the total export revenue was 1.32 billion U.S. dollars, but continued to grow until 2008, when it peaked at a post-crisis high of 1.88 billion U.S. dollars.

In 2009, another global financial downturn hit Indonesia's major footwear export destinations, such as the U.S. and EU and led to a drop in export revenue, which stood at 1.72 billion U.S. dollars. Currently, the domestic footwear industry employs slightly more than 400,000 workers.



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