Apindo Regarding Bata Shoe Factory In Purwakarta Closes: Labor Intensive Industry Must Be Attention

Illustration - Bata Store. (Photo: Special)

JAKARTA - The Indonesian Employers' Association (Apindo) said that the labor-intensive sector industry needs to be a concern due to the closing of the PT Sepatu Bata Tbk (BATA) factory in Purwakarta, West Java.

"So, this kind of thing for our labor-intensive industries must be a concern. Because we see that this incoming investment has also begun to shift from labor-intensive sectors to capital-intensive. Because it will be increasingly difficult for the labor-intensive sector today," said Apindo Chairman Shinta W Kamdani at the Apindo office, Jakarta, Wednesday, May 8.

Shinta said that her party did look thoroughly at the demand factors, which were not only domestic, but also foreign demand. According to him, export demand is declining sharply.

"This is back again about the increasing cost and of course in the end a company like Bata even though it has been around for so long in Indonesia, must see if it is still feasible as a business," he said.

According to Shinta, currently, when viewed from the existing conditions with competitiveness and other things, Bata is indeed considered infeasible to continue.

With geopolitical conditions occurring and its impact on Indonesia, this also affects the absorption (absorb) of foreign markets and that is for the export market.

Meanwhile, the domestic market must look at the purchasing power factor.

Because, with conditions like this, the purchasing power must have decreased which must be considered.

"So, in terms of industry like Bata, it's not only now, but he's also on going to have an evaluation and also looking at the current condition that is getting worse. So, he (Bata) can no longer survive," he added.

Meanwhile, PT Sepatu Bata (BATA) officially closed the factory operations in Purwakarta, West Java, as of April 30, 2024.

Shoe Corporate Secretary Bata Hatta Tutuko said the company closed operations due to losses amid declining demand.

"With this decision, the company cannot continue production at the Purwakarta factory," he said as quoted from the information disclosure of the Indonesia Stock Exchange (IDX), Monday, May 6.

Tutuko admitted that BATA has made various efforts over the past four years amid losses and industrial challenges due to the COVID-19 pandemic.

On the other hand, changes in consumer behavior so quickly are also a challenge.

As a result, the company had to close the factory operations in Purwakarta.

Even so, said Tutuko, BATA is committed to ensuring smooth transition for all employees and their partners affected by the factory closure.

"This decision is the best thing that can be taken based on a thorough evaluation and agreement of related parties," he said