Ministry of Industry Encourages Global Competitiveness of Footwear SMEs, Breaking Export Market

Jakarta, InfoPublik - The Ministry of Industry (Kemenperin) continues to encourage the development of SMEs of footwear producers to increase their competitiveness. Moreover, as the world's 4th largest footwear production center, Indonesia has the potential to become a competitive local shoe producer in the global arena, with quality equivalent to world-renowned brands.

Two local shoe brands have penetrated the global market, including Sagara Boots and Pijakbumi. Both are partners of the Indonesian Shoe Industry Development Agency (BPIPI) Sidoarjo, a technical implementation unit under the guidance of the Directorate General of Small, Medium, and Various Industries (IKMA) of the Ministry of Industry.

"BPIPI cooperates with Sagara Boots and Pijakbumi to enter the ecosystem of national footwear industry players because they have succeeded in being examples of quality footwear SMEs players. The hope is the success stories of these two SMEs inspire others to be more adept at reading opportunities in domestic and foreign markets," said the Director-General of IKMA at the Ministry of Industry, Reni Yanita, Jakarta, Thursday (12/30). 

When meeting with the founders of Sagara Boots and Pijakbumi, Reni appreciated the achievements of Sagara Boots and Pijakbumi. They broke the negative stigma of producing poor-quality shoes from developing countries with poor materials and outdated designs.

“Sagara Boots have even penetrated tier-one leather boots, which are equivalent to shoes from Japan, England, and the United States. Meanwhile, Pijakbumi is exporting products to 20 countries in the world," he said.

According to Reni, the two footwear SMEs have proven that local shoe brands are increasingly innovative, with designs that follow the latest market tastes and still pay attention to environmentally friendly and sustainable production. They can serve requests in a custom or according to consumer tastes.

"With the best quality, we are optimistic that local brands can be cooler and have a high selling value compared to foreign brands in big retailers," he said.

Until the third quarter of 2021, the total export value of Indonesian footwear (leather and non-leather) reached USD 4.3 billion. Meanwhile, the GDP of the leather, leather goods, and footwear industry reached Rp20 trillion or grew 7% (y-o-y) in the third quarter of 2021.

The founder and owner of Sagara Boots, Bagus Satrio, said that more and more foreign media were exposing the ability of the Indonesian shoe industry to produce quality boots that could compete with world-class products. Therefore, the world community can know the local shoe products.

“We use the best leather, not just any leather materials. In addition, with the best quality leather and soles, our boots are even more expensive than American products. We sell it at a price of around Rp. 6 million," said Bagus.

Sagara Boots produces handmade shoes and they accept custom orders. The Sagara team also implemented a waiting list system of up to four months due to the limited workforce and the increasing number of orders.

“We can only produce 40-60 pairs of shoes in a month. Abroad, Sagara Boots are in demand because they are handmade, custom, and have high-quality leather,” he added.

Meanwhile, Pijakbumi is a shoe brand from Bandung characterized by eco-friendly materials made from natural leather and plant extracts, one of which is sawdust.

Pijakbumi was founded by Rowland Asfales. It has the concept of an original design, local wisdom, and environmentally friendly materials to reduce carbon emissions. By mixing and matching selected raw materials, Pijakbumi can produce quality shoe products.

Sagara Boots and Pijakbumi face difficulty accessing imported raw materials and capital for export in production and marketing. In addition, Pijakbumi is also trying to calculate eco-friendly materials as the main material for its shoes to make the business more sustainable.

"We hope there is a way to calculate the use of environmentally friendly materials for innovative companies and can get tax deductions related to industrial processing that is committed to reducing carbon emissions," said Rowland.

The Director-General of IKMA emphasized that through BPIPI, his party is committed to assisting footwear IKM players in finding solutions to increase productivity and ease of access to export markets.

"To solve problems related to the export of these rigid footwear products, we will facilitate them to be able to access the Ease of Import for Export Destination facilities, and access financing for exports through the Indonesian Export Financing Agency," said Reni.

Meanwhile, regarding the calculation of the use of environmentally friendly materials, the Directorate General of IKMA brought together footwear SMEs with the Ministry of Industry's Green Industry Center.

To support shoe business players to grow together, BPIPI created a digital platform called the Indonesia Footwear Network (IFN) via the https://ifn.bpipi.id/.IFN page since the Covid-19 pandemic.

"On this platform, various actors and the national footwear industry community can collaborate as business partners to share value," he said. Through IFN, BPIPI will be able to provide relevant information for the domestic and global markets on the potential of the Indonesian footwear industry from the upstream to downstream sectors, Reni added.

Head of BPIPI Edi Suhendra said as a facilitator of the national footwear industry, BPIPI has a role in strengthening the various communities of the footwear industry in Indonesia.

Thus, IFNs will be encouraged to complete and collect industry information that currently exists in each community. BPIPI also continues encouraging partnership programs in the footwear industry so that the industrial ecosystem, especially footwear SMEs, can be more independent, produce better product quality, and have the potential to go global.

"As one of the largest global footwear manufacturers, Indonesia needs to take the initiative to integrate information from manufacturers, suppliers, material sources, local brands, and organizations engaged in the footwear industry sector," said Edi.

Therefore, IFN, led by BPIPI, is here as a provider of relevant information for the potential market for the footwear industry from upstream to downstream, both domestically and globally.

Author: Baheramsyah

Editor: Wawan Budiyanto

Translator: Wilda Stiana