In 2021, exports of leather and footwear products were valued at $6.15 billion. [Produk Alas Kaki Indonesia Semakin Mendunia - Minews ID]. The value of leather and footwear exports in June 2022 was $4.62 billion: +41.26% compared to the same period of 2021, according to data @1ndonesia_go_id. The Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) is being negotiated, writes @Bisniscom, with the aim of increasing trade and expanding direct investment.
The industrial sector has now become a pillar for the Indonesian economy. The sector's contribution to the trade balance continues to grow. The Ministry of Industry said that the contribution of the industrial sector, when considered in the period January-August 2022, was the largest. That is to say, reaching 71.55 percent of the total value of domestic exports of 194.60 billion dollars.
From this framework, the fairly bright performance of the industrial sector certainly provides a promising picture for the future of the national economy. However, the global situation is still obsessed with the risk of uncertainty.
"The export performance of the manufacturing sector continues to grow, despite the risk of uncertainty of global conditions looming over the national economy," Industry Minister Agus Gumiwang Kartasasmita said sunday in Jakarta (18/9/2022).
The Minister of Industry also explained that shipments from the manufacturing industry sector have consistently contributed to Indonesia's trade surplus. "Our trade balance has been in surplus for 28 consecutive months, and this shows that the government's policies in the economic recovery are on the right track," he said.
Agus Gumiwang added, of the various types of industrial subsectors, one of which is the leather, finished leather goods and footwear industries, which grew positively by 13.12% in the second quarter of this year.
This brilliant performance is among the top three in the manufacturing sector. This is due to high export demand, improved investment attractiveness and the diversion of orders from different global brands to Indonesia.
"Utilities in the leather goods, leather goods and footwear industries also increased to 84.49% last July. Meanwhile, the utility before the pandemic was about 80.18 percent," Minister Agus said.
According to data from the Indonesian Footwear Association (Asprisindo), the footwear industry continues to grow. In 2021, exports of leather products, finished leather goods and footwear grew by 28.3%. The value is quite good, that is, 6.15 billion dollars.
With such an export value, Indonesia's position as a world shoe manufacturer is now in sixth place. "Export growth continues to grow this year. The increase is more than 40 percent," said Aprisindo Secretary General Lany Sulaiman.
Meanwhile, the value of leather, finished leather goods and footwear exports in June 2022 was recorded at $4.62 billion, an increase of 41.26% compared to the same period of the previous year of $3.26 billion. It is undeniable, Indonesian footwear products, especially Indonesian sports shoes for foreign markets, are growing rapidly. This is because a number of global brands produce their goods in Indonesia which are then re-exported to the global market. For example, in the markets of the United States or the European Union.
The competitiveness of sports footwear products from Indonesia is confirmed by data from the Central Statistical Agency (BPS). The agency's data shows that Indonesia's sports shoe exports to the United States will reach $1.63 billion in 2021, up 60.77% from the previous year.
Exports to the United States contribute about 35.41% to total domestic sports shoe exports in 2021. This makes the United States the largest market, followed by China and Belgium.
As one of the leading non-oil and gas products, the government continues to encourage the wider market for footwear products from Indonesia in the global market.
Market breakthrough
In this context, the strategy of strengthening the share of Indonesia's export market in the main export market (market maintenance) is still appropriate. Aside from that, make market discoveries by targeting non-traditional countries or potential markets.
This is in line with the promise made by the Minister of Commerce, Zulkifli Hasan. That is to say, footwear products are classified as labor-intensive industries. This means that the industry becomes a strategic sector because it absorbs many workers.
For example, Nike's partner factory, PT Pratama Abadi Industri, which houses 40,000 workers. Zulkifli Hasan also hopes that Indonesian footwear products will expand their market, not only to the main export market (market maintenance), but also to make market discoveries targeting non-traditional countries.
For example, the government's plan to expand the market for Indonesian products in the European Union. "The government is currently negotiating an agreement with the European Union. Negotiations are expected to be concluded soon to further open up the market for Indonesian products in the European Union, but the issue of open tenders is still constrained. "
For information, Indonesia and the European Union are currently negotiating through the Comprehensive Economic Partnership Agreement between Indonesia and the European Union (IEU-CEPA). However, negotiations between Indonesia and the European Union on the IEU-CEPA are still hampered by several issues, including, among others, the liberalization of tariffs, the elimination of non-tariff measures for Indonesian products in the European Union.
It is hoped that the IEU CEPA negotiations will soon find common ground so that the European Union market for Indonesian export goods will be more open, including footwear, which will have a positive impact on both the GDP and absorption of Indonesian workers.
