RI POISED TO OVERTAKE VIETNAM AS HUB FOR SHOE INDUSTRY

Jakarta, July 28 (ANTARA) - Indonesia is expected to become the world's second biggest hub for the shoe industry in the next two years, overtaking Vietnam, an investment official said.

"Indonesia will overtake Vietnam as the world's biggest footwear exporter with exports estimated at US$2.1 billion per year," Chairman of the Investment Coordinating Board (BKPM) Gita Wirjawan said here on Wednesday.

Indonesia currently ranked third after China and Vietnam in terms of shoe production, he said.

"Indonesia is now able to produce more than 3 million pairs of shoes of famous brand such as Nike, Adidas and New Balance, per year," he said.

He said some producers of shoes of famous brands planned to relocate their industries from Vietnam and China to Indonesia.

However, he stopped short of revealing the names of the shoe producers and the amount of investment.

He said shoe producers had of late begun eyeing Indonesia as the basis of their industries because of some advantages including low wages, favorable labour regulations and conducive political and economic conditions.

Because of that, not only shoe producers but also textile and electronic companies were expected to relocate their plants to Indonesia, he said.

Earlier, Chairman of the Indonesian Shoe Producers Association (Aprisindo) Eddy Widjanarko said two Korean shoe producers would build new plants in Indonesia at a cost of US$150 million.

The two companies which had so far produced shoes bearing Adidas and Geox brands would relocate their plants from Vietnam and China, he said.

Eddy said Adidas would build a new plant on 20 hectares of land in Serang, west of Jakarta, at a cost of US$100 million, and Geox was looking for 5.6 hectares of land in Pasuruan, East Java, for its US$50 million new plant.

"Adidas will have a production capacity of 850,000 pairs of shoes per year and Geox 1.2 pairs per year," he said.