Six footwear firms are investing in a relocation

Six footwear firms are investing in a relocation

Indonesia's footwear industry has won an investment of US$550m from six Taiwanese and South Korean footwear manufacturers who are relocating their plants from China and Vietnam, according to the Indonesian Shoes Association (Aprisindo).

The relocation, mainly to East Java, has been prompted by riding labour costs and raw material issues in China and Vietnam, and is expected to finish within this current year.

In all, six manufacturers are outsourcing a significant amount of shoes and products for world famous brands, including Nike, Adidas, Reebok and Geox.

Among these manufacturers, four Taiwanese firms who produce shoes for Nike and Reebok are completing their relocation with a total investment capital of $400m. In the meantime, two South Korean producers based in Vietnam, who outsource for Adidas and Geox, will invest $150m in Indonesia.

"Geox was targeted to produce up to 100,000 pairs of shoes per month, while Adidas would produce up to 850,000 pairs of shoes until the end of 2010," Eddy Widjanarko, chairman of Aprisindo said.

"In January 2011, Adidas is targeted to produce 1.2m pairs of shoes per month," he added.

Aprisindo said further footwear manufacturers are expected to relocate to Indonesia over the next few years, but that current electricity tariff hiking will hamper the investment wave.