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Growth of Indonesian footwear imports outpaces exports
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A trainer of the Industry Ministry’s footwear industry development center (BPIPI), Hariyono, shows one of the shoes made in the training center in Sidoarjo, East Java, on April 18. (JP/Stefani Ribka)
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ndonesia’s 2.9 percent growth in exports of footwear was outpaced by a 16.9 percent increase of imports in 2016, Central Statistics Agency (BPS) data shows. The government attributes the fact to a global economic downturn and sluggish investment in the sector in the past two years.
“In the past two years, South Korean and Chinese shoemaker giants operating in East Java have expressed wishes to open new factories elsewhere, like in Sukabumi and Majalengka in West Java, for the low labor costs, but the conditions in the latter areas were not conducive for it: There weren’t enough laborers and energy costs were still high, so they opened in Vietnam, instead,” said Alfiyan Darojat, project planning officer with the Industry Ministry’s footwear industry development center (BPIPI) on Tuesday.
(Read also: Footwear exports projected to grow up to 10 percent)
In 2016, Indonesia exported 661 million pairs of footwear, a 2.9 percent increase year on year (yoy), while it imported 394 million pairs, a 16.9 percent increase yoy.
The largest portion, 28.12 percent, of the exports went to the United States, followed by China, Belgium, Germany and Japan, while most, 44.79 percent, of the imports came from China, followed by Vietnam, Hong Kong and the US.
The situation of a faster growth of imports than exports occurred from 2010 to 2016, except in 2014 and 2015 when export growth outpaced that of imports, BPS data shows.
The ministry wants to attract Rp 2.5 trillion (US$188.67 million) in investments into the sector this year. Seven shoemakers and leather processors have stated commitments to invest $262.18 million in 2017 and 2018. (bbn)
