Investors from China, Taiwan and South Korea are in talks to take over the production activity of the three troubled shoe makers which closed with the loss of 18,000 jobs at the end of last year, the chairman of the Indonesian Footwear Association (Aprisindo) has told just-style.

Eddy Widjanarko said: "The investors are interested in taking over the three companies for their experience in shoe distribution."

The three manufacturers - PT Tong Yang, PT Dong Joe and PT Spotec - mainly make footwear for Reebok, which is owned by German sporting goods giant Adidas.

PT Tong Yang - which is located in Bekasi - wound down its operations to allow the business to restructure and secure new financing.

PT Dong Joe closed on 14 October following the departure of its owners from the country, while its sister company PT Spotec closed because of financial difficulties exacerbated by the refusal of material suppliers to provide further credit. These two factories are situated on the outskirts of Jakarta.

However, as Mr Widjanarko told just-style: "The problem is the owners of Spotec and Dong Joe are not in Indonesia, and Tong Yang by itself cannot meet the production capacity required by the investors."

A special team has been set up by the government to seek the best possible solution, including representatives from the Manpower Ministry, Trade Ministry, Industry Ministry, and local banks.

A member of this special team told just-style: "The buyer is key. The companies can resume their work at any time if there is a buyer.

"The suppliers need time and money to make some changes to meet the requirements of Adidas after the acquisition of Reebok. But not all the companies have the money to do make these changes, particularly to the lay-out of the factory production system."

Under temporary management installed by the creditors the companies have failed to resume operation in early January as initially planned.

The debts of the three companies including worker's wages, tax, and debt to raw material suppliers amount to IRD650bn (US$72m).

By Baari La Inggi.