GOVERNMENT MUST BE SERIOUS ABOUT SOLVING SCARCITY OF RAW MATERIALS

The Association of Indonesian Shoe Producers (Aprisindo), urges the government to be more serious about solving scarcity of leather raw material in the national footwear industry. Low domestic supply of leather has caused a very high dependency on import leather. Aprisindo recorded that 70% of leather demand for the shoe industry is fulfilled by import.

Secretary General of Aprisindo, Binsar Marpaung, when contacted by Business News on Wednesday (January 5), stated that a very high dependence on import leather raw material has caused low competitiveness of domestic shoe products. And, in the free trade era (AC-FTA), local shoes are less competitive in terms of price if compared to imported shoes which are sold at very cheap prices. “Therefore, we urge the Ministry of Industry to immediately take concrete steps to solve scarcity of leather”, Binsar said.

Binsar said that he has coordinated with the Ministry of Industry to discuss about the plan on establishment of raw material center (RMC) which was once delayed due to differences of opinion between Aprisindo which represents shoe producers and the Ministry of Industry representing the government. Binsar said that the existence of RMC is very important for the smoothness of process of shoes production, particularly for small and medium businesses.

With an integrated raw material center, it will be easier foir shoe producers to fulfill their needs for raw materials. Binsar said that currenlty, in Jakrta particularly, raw material centers and shoe accessories are only available in Harco Mangga Dua. The location is deemed less strategic because it is mixed with other products, and not all shoe producers know about raw material market in that location.

Binsar said that Aprisindo and the Ministry of Industry are visiting the location to see whether it is possible to be developed in to RMC. In the meantime, the best alternative is WTC Mangga Dua. Besides its large size of area, many people are already familiar with WTC. “We and the Ministry of Industry will try to make approaches to the WTC management about the possibility to rent WTC as a center of raw materials of shoes”, he said.

According to him, sellers of raw materials for shoes who are currently opening shops in Harco Mangga Dua were quite enthusiastic about this and they supported the establishment of RMC. They said that they are willing to open new shops in RMC which is facilitated by the Ministry of Industry. To attract the sellers to open shops in RMC, the government should provide incentives, such as offering free rent for the first year.