Korean Factory Group Opens $60M Footwear Factory in Indonesia

Korean Factory Group Opens $60M Footwear Factory in Indonesia

Indonesian Industry Minister Saleh Husin inaugurated a $60 million shoe factory in West Java that will produce shoes for Nike, according to a media report.

The shoe factory in Garut has an annual production capacity of 15 million pairs and will provide employment to 5,500 people, according to a news release from the ministry, according to the Indonesia-Investments.com.

The factory expects to export all its shoes to Europe, the United States and other parts of Asia. The Indonesian government is actively recruiting footwear manufacturers to maximize foreign exchange earnings in the non-oil & gas sector and provide jobs.

Husin said the government hopes that the factory owner – the Changshin Group of South Korea – can promote Indonesia as a regional production hub for the footwear industry in Asia.

Investment in Indonesia’s footwear industry reached $836 million in 2013, according to Husin.

In 2014, Indonesia exported a total of $4.1 billion worth of footwear, up 6.4 percent from the preceding year, but short of its $5 billion footwear export target, Indonesia-Investments reported. Earlier this year, 16 investors, mostly from South Korea and Japan, cancelled their plans to establish footwear factories in Indonesia due to uncertainty over Indonesia’s minimum wage growth. In recent years, dozens of footwear manufacturers have reportedly moved their factories to East Java or to other ASEAN member countries (such as Cambodia and Vietnam) where wages are more competitive.