Indonesia To Pressure Nike To Keep Orders Local

July 16, 2007
Nike accounts for half of all shoes exported from Indonesia.

The Indonesian government hopes to persuade Nike against shifting production elsewhere after the shoe giant halted orders from two local companies citing quality concerns, a senior industry official said July 15.

"We will encourage Nike to stay, and not just move away because it severed contracts with two (Indonesian) companies," Metal, Textile Machinery and Miscellaneous Industry director general Ansari Bukhari said.

Nike has announced it will stop ordering from two Indonesian subcontracting companies -- PT Hardaya Aneka Shoes Industry and Nagasakti Paramashoes Industry -- as they failed to maintain Nike's production standards and export schedules.

Bukhari said that the government will try to mediate between Nike and the two companies but also expressed the hope that should the mediation fail, the company will replace the suppliers with other local companies. "We hope very much, that the company will shift its orders," he said, adding that Nike was also ordering shoes from five other Indonesian companies.

Indicating the importance of the orders to the economy, Bukhari said that from Indonesia's 1.5 billion shoes exported in 2005, Nike accounted for about half.

Copyright Agence France-Presse, 2007

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