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View all search resultsCritical months ahead for shoemakers as costs climb, demand falters
Footwear manufacturers say the next few months will be critical and warn that layoffs could become unavoidable should uncertainty and weak domestic spending persist.
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A shoemaker works on a pair of shoes at Pabrik Sepatu Bandung Cibaduyut 1920 in Bandung, West Java. (PABRIK SEPATU CIBADUYUT 1920/- )
A
fter decades in the shoemaking business, Helmi Muntahal has grown accustomed to seeing production costs fluctuate one item at a time. But this year has been different.
"Everything has gone up together," said Helmi, who runs Pabrik Sepatu Bandung Cibaduyut 1920, a family-owned footwear factory in Cibaduyut, Bandung's renowned leather shoemaking district.
His family operates the factory, which produces footwear for several Indonesian brands, since the 1980s, including names such as NAH Project, Brodo and Geoff Max.
"It's no longer just one specific item. Almost every material has become more expensive."
The simultaneous increase in raw material prices has made running the factory increasingly difficult. Many of the adhesives used in production are imported, while nearly all other inputs have also become more expensive, forcing manufacturers to raise selling prices at a time when consumers are cautious with spending.
According to Helmi, individual material costs have increased by around 30 to 40 percent. But passing those higher costs on to customers has proven difficult.
"If we increase prices, it affects sales. But if we don't increase them, we lose money," he told The Jakarta Post on June 24.
