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Footwear manufacturers receive aid to modernise machinery
08
Jul '09
The Industry Ministry declared nine footwear manufacturers eligible for the government aid to modernize their industrial machinery in order to increase efficiency as well as the productivity.

Under this aid program, the government will finance 10 percent of the new machinery purchases, to the manufacturers. The Ministry will provide over Rp. 4.2 billion to these nine shoe companies. The government has allocated a total of Rp. 55 billion for the year under this aid program.

This aid, to enhance the Indonesian industries' capacities, is a part of government scheme, said Mr. Singgih Witarsa, the executive director of the Indonesian Footwear Manufacturers Association (Aprisindo).

As most of the machineries that are being used currently in the footwear sector are very old, the government has decided that this sector is eligible for the machinery renewal fund. Such kind of help is also being extended for the textile industry and sugar factories.

Over 15 companies have applied for such support and this number is below the government's target to assist at least 30 companies in this way, informed Mr. Singgih. As the government wants each applicant to invest minimum Rp. 500 million for the purchase of new machineries, the number of applicants is on the lower side, he added.

As majority of the companies are just small and medium enterprises (SMEs), such a large investment is considered too high for them. Other than this, the companies are of the opinion that this is not the perfect time to refurbish their machinery, said Mr. Singgih.

The government is still willing to receive applications for footwear machinery investment, till July 30, informed Mr. Ansari Bukhari, the Director General of Machinery, Metal and Textile in the Ministry of Trade and Industry.

The aid can be still be availed of in July if the companies prove that they have already purchased new machines, he added by saying.

Total footwear exports for this year are expected to reach $1.8 billion with a slight difference of $50 million compared to the previous year.

Fibre2fashion News Desk - India

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