Indonesia Poised To Overtake Vietnam As Hub For Shoe Industry

Indonesia is expected to become the world’s second biggest hub for shoe industry in the next two years, overtaking Vietnam, Antara news agency reported quoting an investment official as saying.

“Indonesia will overtake Vietnam as the world’s biggest footwear exporter with exports estimated at $2.1 billion per year,” Chair of the Investment Coordinating Board (BKPM) Gita Wirjawan said here on Wednesday.

Indonesia currently ranked third after China and Vietnam in terms of shoe production, he said.

“Indonesia is now able to produce more than 3 million pairs of shoes of famous brand such as Nike, Adidas and New Balance, per year,” he said.

He said some producers of shoes of famous brands planned to relocate their industries from Vietnam and China to Indonesia.

However, he stopped short of revealing the names of the shoe producers and the amount of investment.

He said shoe producers had of late begun eyeing Indonesia as the basis of their industries because of some advantages including low wages, favourable labour regulations and conducive political and economic conditions.

Because of that, not only shoe producers but also textile and electronic companies were expected to relocate their plants to Indonesia, he said.

Earlier, Chair of the Indonesian Shoe Producers Association (Aprisindo) Eddy Widjanarko said two Korean shoe producers would build new plants in Indonesia at a cost of $150 million.

The two companies which had so far produced shoes bearing Adidas and Geox brands would relocate their plants from Vietnam and China, he said.

Eddy said Adidas would build a new plant on 20 hectares of land in Serang, west of Jakarta, at a cost of $100 million, and Geox was looking for 5.6 hectares of land in Pasuruan, East Java, for its $50 million new plant.

“Adidas will have a production capacity of 850,000 pairs of shoes per year and Geox 1.2 pairs per year,” he said.

Tags: Vietnam Shoe Industry