Indonesia’s footwear industry is gaining renewed momentum as 12 foreign direct investment (FDI) companies plan to invest a combined IDR 8 trillion between January and May 2025. The investment is expected to significantly boost production, with a target capacity of 64.6 million pairs of shoes and 214.6 million footwear components, and generate over 80,000 jobs. The Ministry of Industry sees this as a positive indicator that Indonesia remains attractive for labor-intensive, export-oriented industries. Several regions, including Majalengka, Jepara, Indramayu, and Brebes, have emerged as key destinations for this new wave of investment.
One notable success is PT Selalu Cinta Indonesia (SCI), a Nike shoe manufacturer based in Salatiga, which exported 124,117 pairs worth USD 2 million to India in May 2025, with plans to reach 227,654 pairs by September. Despite challenges like India’s Quality Control Orders (QCO) requiring Bureau of Indian Standards (BIS) certification, Indonesia’s diplomatic efforts have helped ease trade barriers. Export performance remains strong—footwear exports reached USD 1.89 billion in Q1 2025, up 13.8% year-on-year. However, the sector faces headwinds, including tariff wars involving the U.S. and domestic consumer hesitation due to price hikes. According to May’s Industrial Confidence Index (IKI), the footwear and leather sector was one of only two manufacturing subsectors experiencing contraction. Rising competition in the middle-lower market segment and economic slowdown in key export destinations like the U.S. also pose risks. Nonetheless, expansion into South Asia, the Middle East, Africa, and Latin America offers promising growth avenues.
Wednesday, 18 June 2025 08:17
Footwear Industry Attracts IDR 8 Trillion Investment from 12 Foreign Companies
