Nike to step up Indonesia manufacturing

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nike-factory-vietnamUS sports apparel maker Nike has said it wants to make Indonesia the biggest production base for the company and invest into more factories in Southeast Asia’s largest economy.

The news spread when Jeff Perkins, president director of Nike Indonesia, met with Industry Minister M.S. Hidayat on April 20.

According to Hidayat, Nike Indonesia has cooperated with 38 contract factories that employ around 175,000 workers, ranking Indonesia among the largest manufacturing base for Nike products, apart from China and Vietnam.

However, Perkins also raised several issues on the investment climate, especially, in regards to the country’s labour condition, referring to a series of recent labour demonstrations in Jakarta and some industrial townships near the capital.

At the end of last year, workers held rallies to voice out anger towards outsourcing scheme that limited benefits and called for a wage increase. Different administrations in Indonesia, especially in Jakarta, Banten and West Java, that harbour a large numbers of manufacturing companies, subsequently raised the minimum regional wage as a response.

In Jakarta, minimum wage was raised by 44 per cent to $227 per month.

Eddy Widjanarko, chairman at the Indonesian Footwear Association, said that several foreign investors suspended their plans to invest in footwear industry, following the minimum wage increase. The delayed investment amounted to more than $1 billion, he said.

 

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Reading Time: 1 minute

US sports apparel maker Nike has said it wants to make Indonesia the biggest production base for the company and invest into more factories in Southeast Asia’s largest economy.

Reading Time: 1 minute

nike-factory-vietnamUS sports apparel maker Nike has said it wants to make Indonesia the biggest production base for the company and invest into more factories in Southeast Asia’s largest economy.

The news spread when Jeff Perkins, president director of Nike Indonesia, met with Industry Minister M.S. Hidayat on April 20.

According to Hidayat, Nike Indonesia has cooperated with 38 contract factories that employ around 175,000 workers, ranking Indonesia among the largest manufacturing base for Nike products, apart from China and Vietnam.

However, Perkins also raised several issues on the investment climate, especially, in regards to the country’s labour condition, referring to a series of recent labour demonstrations in Jakarta and some industrial townships near the capital.

At the end of last year, workers held rallies to voice out anger towards outsourcing scheme that limited benefits and called for a wage increase. Different administrations in Indonesia, especially in Jakarta, Banten and West Java, that harbour a large numbers of manufacturing companies, subsequently raised the minimum regional wage as a response.

In Jakarta, minimum wage was raised by 44 per cent to $227 per month.

Eddy Widjanarko, chairman at the Indonesian Footwear Association, said that several foreign investors suspended their plans to invest in footwear industry, following the minimum wage increase. The delayed investment amounted to more than $1 billion, he said.

 

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