Raw material center for leather sector in limbo

October 08, 2009 - Indonesia

The Ministry of Industry and Trade had in the past, announced setting up a raw materials trading centre for the benefit of the over 300 small and medium scale leather producers in the sector. But budget constraints seem to be coming in the way of the Ministry in sanctioning the funds.

These centers, expected to have a similar concept to the textile center in Mangga Dua, are expected to help leather SMEs producers, which mostly supplying footwear to the domestic market and who find it difficult to import raw materials such as buckles and ribbons.

The Industry Ministry had proposed Rp 4- 5 billion (US $420,000-525,000) in annual funding from the ministry to, among other things, hold promotions and subsidize rental expenses, as part of its support for the raw material center plan.

Exuding distress, the Chairman of the Indonesian Footwear Producers Association said that, the country's footwear producers will have to wait until next year as the Ministry has confirmed that it has no money to support setting up of the centre.