Wednesday, 22 June 2011

Indonesian Shoes Competitive Against China

As one of reliable export commodity, footwear plays an important role as forex contributor to the state. Besides, because of the labor intensive nature of the industry, the footwear industry accommodates workers in great number. The two roles, as forex contributor and labor absorber are enhancer of growth year after year, and vitalizes investment including foreign investment.

Data of the Indonesian Footwear Association (Aprisindo) showed that export of national footwear this year was targeted to reach USD 2.4 billion. Meanwhile ini the domestic market Apsirindo reported increase of 30% this year against previous year at Rp 27 trillion.

Positive trade performance of national footwear, at domestic or export market, testifies that national footwear industry continues to exist in spite of import invasion from china. On the other hand, the ACFTA era should recharge spirit for Indonesian footwear producers whereby to sharpen their competitive edge through betterment of quality and design.

Head of the Small Business (UKM) Development Division Tongki Komaladi was optimistic that Indonesian products were competitive against China’s product at the domestic market. According to Yongki, invasion of china’s products to Indonesia was not a hindrance to the domestic shoes industry. Evidently sales of local shoes remained stable or even increasing. The most important thing was to create innovative products “the more unique our products the harder it would be for china to compete with us” Yongki remarked.

In fact the storm of china’s products caused by the ASEAN-China Free Trade needed not to be over responded by Indonesian business people with excessive fear. Every shoes producers, Yongki said has their own strategy to wall out invasions, so it was not necessary to worry that China would dominate our market. He was still optimistic that although around 60% of shoes raw materials were imported his products would not be edged aside by China.

Admittedly there were still obstacle faced by national footwear industry, among them great dependency on imported raw materials and high bank interest. He elaborated that bank interest at Bank Indonesia was still two digit. In addition to that the cost of logistic collecting during distribution was very expensive. All were regarded as hindrances to the development process of national footwear industry. Therefore, according to Yongki it was simply wrong to beg to the Government to give facilities and convenience.

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