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Indonesia key competitor for footwear & textile industry

25
Nov '08

Since the beginning of 2008, due to high labour cost in China, there has been a trend of shifting investment from China to South East Asian countries (ASEAN), in which Vietnam has emerged as one of the most attractive destinations.

However, Vietnam's local Government and Associations are currently worried about competition from Indonesia since more and more investors in textile, garment and footwear industry from Hong Kong and Taiwan, who once eyed Vietnam as replacement of China, are now moving towards Indonesia.

Experts are of the opinion, increasing labour cost is the main reason for shifting focus to Indonesia, where in low priced workers are still available.

According to Vietnamese Commerce Affair in Indonesia, so far, in 2008, investors from Hong Kong and Taiwan put in US $700 million on near about 22 shoes factories in the region, after leaving China.

In addition, Vietnamese footwear industry, for the past two years, is coping with anti–dumping duties imposed by European Council, said Diep Thanh Kiet, Vice Chairman of Ho Chi Minh city Shoes and Leather Association(SLA).

Recently, Indonesian Government has approved a budget of IDR55 billion for the footwear industry and IDR255bn for the textiles and garment sectors to support the local enterprises to improve their capacity by installing latest machinaries and equipments.

Fibre2fashion News Desk - Vietnam

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