Shoe manufacturers turn to Central Java to compete with Vietnam
01/08/2016
Selalu Cinta Indonesia, a subsidiary of the Karet Murni Kencana Group, has said it began building a new production unit in the town of Salatiga at the start of 2016 and will start making shoes for US brand Converse in October, beginning with an output of 300,000 to 500,000 pairs per month, but with the capacity to make 1 million pairs per month in future. The new factory will employ between 3,000 and 5,000 people.
In recent comments to local media, Selalu Cinta Indonesia said it has embarked on the Salatiga move because the minimum wage in Central Java is $99, less than half the rate in Banten, where Karet employs around 17,000 people. Banten and East Java (where Surabaya is) have been the most important footwear-producing regions of Indonesia in recent years. Karet has said it is currently making 1.2 million pairs of shoes per month for Nike, 300,000 pairs per month for Converse, 100,000 pairs of boots for Hunter and, for the domestic market, around 100,000 pairs per month for footwear brand Eagle.
Karet vice-president Erry Sunarli said in recent comments that the group has calculated the average monthly wage it pays footwear workers in Indonesia at $123. Comparative figures the group has for competitor locations include $118 in Vietnam, $77 for India and $68 for Bangladesh. Mr Sunarli said Karet has found itself “competing hard” with Vietnam in particular and he explained that the cost of making shoes in Vietnam at the moment is $1.50 than it is in Indonesia.
Share this story:
