Indonesia welcomes Pirelli, Italian touch for local shoes

4/26/2012

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Imagine a pair of shoes with Italian design and Indonesian craftsmanship. Those are the fruits of mutual partnership Industry Minister MS Hidayat had in mind when he met with Italy’s Foreign Affairs Minister Giulio Terzi di Sant’Agata and his 31 business delegates in Jakarta on Tuesday.

“I have asked for a ‘G-to-G’ agreement on footwear industry cooperation. We need a footwear designer consultant for small and medium enterprises, such as shoemakers in Cibaduyut and Sidoarjo. We discussed it with the foreign minister earlier today and will be followed up by our staff,” Hidayat said after a bilateral meeting.

The meeting was held in conjunction with the signing of a joint venture agreement between Indonesian vehicle component maker PT Astra Otoparts and Italian tire company Pirelli & C. SpA for the construction of a motorcycle tire plant with a total investment of $120 million.

Pirelli, the world’s fifth-largest tire producer, would control 60 percent of the joint venture’s shares, the rest being held by Astra Otoparts, a subsidiary of diversified company PT Astra International.

By establishing a new plant in Indonesia, Pirelli hoped to strengthen its presence in the Southeast Asia region, the largest motorcycle market in the world, with 250 million motorcycles.

“Italy has been widely known for its fine automotive and footwear products. Indonesia produces a lot of natural resources, some of which have also been exported to Italy. It will be better if Italian businesspeople can invest in our automotive industry and footwear, which can absorb more workers,” Hidayat said.

Sant’Agata said Italian businesses were ready to engage more with Indonesian companies and expand their outreach amid the continued eurozone crisis. He also acknowledged the large, young Indonesian population as a base of the upcoming bilateral economic cooperation.

“Our government quickly anticipated the [economic downturn] situation, as a result, our economy remains stable and Italian families grow wealthier than most Europeans. A more-open economy supports our productive days. By strong willingness, Italy and Indonesia can integrate more,” he said.

The realization of Italian company’s investment in Indonesia in 2011, excluding oil and gas and banking sectors, stood at $5.9 million comprising 39 projects, as stated by the Indonesian Investment Coordinating Board (BKPM). The investment is still considered small compared to other European countries’ investment, such as England, which stood around $158.1 million.

“Within oil and gas sector, there is a registration of interest to invest around $3 billion, which is a good sign. But I think in a context of a two-economy making up $2.5 trillion, the GDP of the two countries, we can do a lot more and it takes getting to know each other better,” said Trade Minister Gita Wirjawan.

In line with the government’s plan to curb subsidized fuel consumption, Hidayat expected Italian fuel-to-gas converter kit producers to cooperate with state-owned companies soon.

Trade between Indonesia and Italy has been growing robustly, with total trade of $4.39 billion, up nearly 40 percent from $3.27 billion last year.

Indonesia mainly exported coal, chemical products and palm oil, while Italy shipped machinery to Indonesia, including home appliances, iron pipes, cars and spare parts and accessories.

 

Source: The Jakarta Post - 26 April 2012