JAKARTA: Five Taiwanese and South Korean-based companies are committed to build footware factories in Indonesia with total investment of US$500 million.Those companies had submitted their investment plan to the Investment Coordinating Board (BKPM), said Director of Various and Textile Industries at Directorate General of Manufacturing Industry Basis Budi Irawan.Five companies from Taiwan and South Korea had submitted their investment plan in shoes sector. Some of them produce the component only while other integrated to finished product, he said, yesterday.Budi said that one of the companies has committed to invest US200 million capitals while other will invest US$15 million up to US$500 million.I didnt remember their names, yet, the total value of their investment is around US$500 million, he added.The total value is nearly equal with the investment in 2010. Investment in footwear sector reached US$700 million in 2008.However, not all commitments from 2008 have been realized because global crisis occurred. Currently, its realization is running in phases although not all of it.The investment realization is expected to reduce the dependence on imported raw materials and shoes components, which reaches 60% against national footwear production.He admitted that national footwear component and raw material industry is still unable to fulfill the needs of domestic footwear producer since it newly grown.Footwear component and raw material industry such as sol, manic-beads, and buttons is newly grown and it still unready to fulfill the market demands although there was an increase of investment. In fact, footwear product demand continues to increase particularly in export market,This condition was one of the reasons that increased the import of footwear product during the first month of 2011, he assessed.Directorate of Import at Trade Ministry revealed that the import of footwear product soared 43.47% during January- April 2011 compared to same period last year at US$42.12 million.Low-endBudi didnt deny that footwear import will likely increase but he estimates most of it are low-end footwear. Footwear import is quite large, yet, its generally for low-end market as a result of strong impact. We dont know for sure how much since most of the footwear are illegal as seepage from China. There is no import for high-end shoes.Currently, China becomes the largest low-end footwear exporter in Indonesia. China even has shifted its production from Vietnam to our country since the production in Vietnam is rapid but expensive now and has bad quality while we are cheap and has good quality although less rapid.Indonesian Footwear Association (Aprisindo) Eddy Widjanarko said the increase in footwear imports result from the stronger IDR against US$.The IDR strengthening made the value that must be paid to the importer in IDR smaller. The import becomes more efficient then the production itself since the US$ exchange rate weakened against IDR, he said.He estimates the increase in import will still occur until the end of this year. (T06/NOM)
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