Shoe industry in RI still attracting investors: BKPM chief

Jakarta (Antara News) - Investors` interest in Indonesia`s shoe industry is still high despite the fact that many shoe companies have closed their businesses, the country`s top investment official said.

"The number of new companies investing in the shoe industry exceeds that of companies that have withdrawn their investment," Capital Investment Coordinating Board (BKPM) Chairman M Lutfi said here on Tuesday.

He said in the 2006-2007 period, there were at least nine new companies coming to Indonesia to invest in the shoe manufacturing business.

Of the nine, five came from South Korea, namely PT Poongwon Indonesia, PT Pratama Abadi Industri, PT Korin Technomic, PT Vision Indonesia and PT Mikwang Prima Indo.

The others were one from Britain (PT Sepatu Mas Idaman) in Bogor, one from Taiwan (PT Karunia Fajar Mellenia) in Tangerang, one local company (PT Berkat Ganda Sentosa) in Pasuruan and one joint venture (PT Nikomas Gemilang) in Serang.

Lutfi said thet BKPM had recorded six companies which had closed their business in the 2003-2006 period. Of the five companies closing their business, five came from South Korea, namely PT Dong Joe Indonesia, PT Eltri Indo Fortuna, PT Taehwa Indonesia, PT Starwin Indonesia and PT Golden Adisius. One company was from Hong Kong, namely PT Doson Indonesia.

The six companies had a combined production capacity of 44 million pairs of shoes annually and employed 24,996 workers, he said.

The BKPM chief said there were now 15-20 large shoe factories with more than 5,000 workers and another 100 medium and small scale firms.

Indonesia exported 146 million pairs of shoes in 2006 worth 1.6 billion US dollars annually.

A total of 50-60 million pairs were exported for Nike Inc worth about 600-700 million dollars per annum, with the number of workers employed reaching 80,000.

Lutfi said shoes industries were needed in Indonesia because they were labor-intensive. Therefore, he said, the government continued to promote development of national brand shoe industries.(*)
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