The footwear producers' association has warned of more bankruptcies next year unless the government steps in to help shoe firms boost their competitiveness.

Djimanto, secretary general of the Indonesian Footwear Association (Aprisindo), said the comparatively high cost of Indonesian-made products made it impossible to compete with producers from countries such as China and Vietnam.

He told the Jakarta Post on Thursday that increases in electricity, fuel and salary prices, high interest rates and illegal fees collected by corrupt officials were to blame. He predicted that the country's footwear exports would decline to US$1.4 billion this year, from $1.6 billion last year, and that many foreign buyers are shifting their orders away from local producers.

Hi comments came after thousands of workers from PT Doson Indonesia took to the streets on Tuesday to demand severance pay. The South Korean company says it is being forced to shut its operation because US shoe producer Nike Inc has terminated its contract.