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NEWS UPDATES Asean Affairs         22  June 2011

US companies to make shoes in Indonesia

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At least one US shoe maker plans to build a factory in Indonesia, and other US companies are exploring opportunities to collaborate with local producers, to make footwear for both countries, an industry representative said on Tuesday.

“They are now exploring opportunities,” said Edi Widjanarko, chairman of the Indonesian Footwear Association (Aprisindo), after meeting the Footwear Distributors and Retailers of America (FDRA) at the Ministry of Trade office in Central Jakarta. Edi said he knew of a plan by a US company to build one or two new factories here and that investment could happen as soon as this year.

The United States has been Indonesia’s biggest overseas market for shoes in the past few years. According to data from Aprisindo, US consumers accounted for 22.6 percent of Indonesia’s total US$2.6 billion in footwear exports for 2010. Exports to the United States would grow at least 30 percent in several years, Edi said. Belgium and Germany were the next biggest export markets, after the United States, for Indonesia’s footwear industry — each with 8.5 percent market share last year.

Matthew Priest, president of FDRA, said that US companies see great opportunity in Indonesia.

“We are searching for a new sourcing market and some of our members have been here for many years,” he said. “For us, it is an educational process so that our members understand about the capacity and the opportunities that lie in Indonesia.”

The US group said that labor shortages in China were one of the challenges in investing there, and its members are increasingly exploring opportunities in other countries such as Indonesia, Vietnam, India and Ethiopia.

FDRA represents companies that account for about 80 percent of all footwear sales in the US, including brand names such as Skechers and Nike.

The trial is ongoing.


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