Indonesia's troubled footwear industry has been given a massive boost after the Italian government agreed to lend $10 million to help establish a state-of-the-art training centre to improve workers' skills and the quality of their exports.

The loan to the Indonesian Footwear Association (Aprisindo) follows years of talks and will be used to develop a teaching centre for local shoemakers, with some of the teachers coming from Italy - regarded as one of the world's best shoe manufacturers.

The timing of the announcement comes as the country's footwear sector has been hit by the global economic downturn. Shoe exports are expected to slump 10 per cent this year after last year saw Indonesia export 217 million pairs.

The Italian Ambassador to Indonesia, Alessandro Merola, revealed that the Indonesian Footwear Service Centre (IFSC) would be based in the East Java town of Sidoardjo and would begin operation in 2003.

He added that the centre is likely to used by his country's footwear industry to promote technology and design capabilities, and explained that Aprisindo would take full control of the running of the centre in its fourth year of operation.

"We will operate the centre for the first three years under Italian assistance, where we will undertake training of the trainers," the ambassador said.

Delighted Aprisindo officials hailed the agreement as a positive step toward a better future and said the world-class training programmes would provide their shoemakers with the skills required to play a greater role in the international market.