Coronavirus: Sports slump kicks 400,000 Indonesian footware workers out of a job

In Indonesia, 400,000 sports shoe workers have lost their jobs and as many as a million people could be out of work by July.

A boy wearing a face mask waits to receive a coronavirus antibody test from health workers at a village in Bali, Indonesia, on Wednesday. Picture: AP

The coronavirus pandemic may have sparked a global boom in leisure wear but there has been little upside for Indonesia’s sports shoe factories, where 400,000 workers have lost their jobs and as many as a million people could be out of work by July.

While exercise equipment and elastic-waisted sportswear have been flying off shelves across the Western world, where lockdowns and social-distancing rules have forced hundreds of millions of people to work and exercise at home, Indonesian producers say the bottom has fallen out of the footwear industry.

Many Indonesian factories are now close to completing existing orders for some of the world’s biggest sportswear companies, including Nike, Reebok and Adidas, and future prospects “are dark” in a year tipped to bring record sales because of the Olympics.

“We were looking forward to record massive growth in the domestic market leading up to (the Muslim holiday) Eid this month, which is the time of maximum sales for us, but because of the pandemic and the restrictions there were problems at all levels: retailers, distributors and factories,” ­Indonesian Footwear Association executive director Firman Bakri told The Australian.

“The ripple effect is being felt by all of us. The lockdown is killing retailers. Retailers are unable to pay suppliers. Factories are struggling to pay salaries and bills, and so on.

“We were looking forward this year to sales leading up to the Olympic Games, and now we don’t know when it will happen.”

Indonesia is the world’s fifth-largest footwear producer, with global annual exports of about $US5bn ($7.5bn). Close to 80 per cent of production is sports shoes, although it manufactures dress shoes for the European market.

The industry’s woes have been compounded by supply chain blockages in recent months, thanks to its heavy dependence on China for raw materials.

“Besides affecting the shoe factories, this will impact the smaller industries that support us as well, like the businesses that make shoe boxes, thread, et cetera,” another industry player, Lany Sulaiman, told The Australian.

“Just imagine — we are five months into 2020 and there are no new orders yet. In the worst case scenario, we could see one million shoe factory employees fired or put on unpaid leave in the next two months if the pandemic persists.”

Unions have accused some manufacturers of using the pandemic as a way of forcing out contract workers without fulfilling their obligations to pay the mandated 13th month Eid bonus and other entitlements.

“It’s ironic because many of them work to produce goods for big brands like Nike and Adidas, which support athletes and the Olympics. These companies can hire expensive athletes, but they can’t ensure the welfare of labour­ers at a time like this?” Congress Alliance of Indonesian Labor ­Unions chair Nining Elitos said.

Shopping malls and retail outlets across Greater Jakarta are set to reopen from next week as the government institutes a phased loosening of restrictions.

Mr Bakri said the reopening would have little impact on his industry, which was dependent on global demand and already had an “overstock of goods”.

The Indonesian Chamber of Commerce estimates more than six million Indonesians have lost their jobs because of the pandemic.