Indonesia Sourcing: Leather goods 2018

Indonesia Leather goods

 

In Indonesia Sourcing: Leather goods 2018, buyers can find:

Verified exporters – 16 featured suppliers offering various types of leather goods

Products – Full-color images with specifications & prices

Supply market intelligence – Supply centers, industry trends, challenges, production and pricing

Export data – Indonesia-wide details and survey results from featured exporters

To read the full report, click on the section tabs below.

Sector highlightsSuppliers & productsIndustry overviewProduct featuresSupplier surveyPDF downloadSupplier list

Indonesia Sourcing: Leather goods 2018 Sector highlights

Industry overviewProduct featuresSupplier survey
  • Indonesia is the fifth largest leather and leather goods exporter in the world.

  • The US is the top overseas market for leather goods.

  • Suppliers are based in Jakarta, West Java, Central Java and Yogyakarta.



  • Cowhide and buffalo hide are among the top material options.

  • Prices vary depending mainly on design complexity.

  • Up to five employees perform the QC.

  • The majority of companies are optimistic of export sales growth in the next 12 months.

  • Upcoming models will feature simple and minimalist designs.

  • Surveyed companies are split between keeping and raising prices.


Indonesia Sourcing: Leather goods 2018 Suppliers & products

indonesia-leather goods-banner

Indonesia Sourcing: Leather goods 2018

• Bags • Wallets • Footwear • Jackets • Other fashion accessories

Our team has visited all Indonesia manufacturers featured here to verify their export capability. Each has a website on GlobalSources.com with full company details, product images with specifications, manufacturing capability and complete contact details.

Click suppliers’ names below to view their full profiles and product offerings on GlobalSources.com.

Sections


Products

Below is a selection of products from our featured suppliers. Click on the images to find more products and supplier information.

For a complete listing of the featured suppliers, click here.

Bags   
India-wooden-handicraftsIndia-wooden-handicraftsIndia-wooden-handicraftsIndia-wooden-handicrafts
India-wooden-handicraftsIndia-wooden-handicraftsIndia-wooden-handicraftsIndia-wooden-handicrafts
Fashion accessories   
Indonesia-leather-goodsIndonesia-leather-goodsIndonesia-leather-goodsIndonesia-leather-goods
Footwear   
Indonesia-leather-goodsIndonesia-leather-goods

Indonesia-leather-goods



Indonesia-leather-goodsIndonesia-leather-goodsIndonesia-leather-goodsIndonesia-leather-goods
Jackets   
indonesia-leather-goodsindonesia-leather-goodsindonesia-leather-goodsindonesia-leather-goods

Indonesia Sourcing: Leather goods 2018 Industry overview

Indonesia Sourcing: Leather goods Industry Overview

Indonesia Sourcing: Leather goods 2018

• Bags • Wallets • Footwear • Jackets • Other fashion accessories

This section discusses key issues affecting export manufacturers in Indonesia, offering insight into industry composition and important supply centers.

Indonesia footwear exportsCompetitive advantagesChallengesIndustry composition
  • Indonesia is in the fifth-largest leather and leather goods exporter in the world.

  • The largest sector of leather goods is footwear.

  • The US was the top overseas market.


  • Having domestic access to raw materials is the main advantage of the industry.
  • There is a strong demand for leather bags and footwear.


  • Government initiatives help strengthen the industry's exports.


  • There is an insufficient supply of leather.

  • Some suppliers find it difficult to comply with costly requirements.

  • Makers of leather goods face intense price competition.


  • The latest Ministry of Industry data in 2013 shows 265 leather goods companies.

  • Midsize companies employ up to 20 employees.

  • Suppliers are based in Jakarta, West Java, Central Java and Yogyakarta.

The Indonesia leather goods industry is enjoying a new wave of government support designed to boost exports.

First of these government initiatives is the inclusion of the leather sector to the strategic and priority master plan. The Director General of Chemical, Textile and Multifarious Industries of the Ministry of Industry stated that the industry is strategic and must be prioritized; therefore, an economic plan for its growth must be developed in accordance with the National Industrial Development Master Plan (RIPIN) 2015–2035, along with textile and furniture sectors.

Indonesia leather goods Industry Overview Exports

Another program from the national administration is the preparation of a tax deduction policy for small and medium enterprises (SMEs), designed to engage SMEs in e-commerce. This policy will be finalized through the revision of Government Regulation (PP) No. 46 of 2013, which sets 1 percent income tax for companies with less than IDR4.8 billion annual revenue. The final tariff plan will be reduced to 0.5 percent. However, the Ministry of Industry has not announced a final date for implementation.

Designs with textile uppers accounted for 37 percent of overseas sales. Those with plastic or rubber uppers generated 11 percent.

Another recent boost for the local leather industry is the Ministry of Agriculture’s announcement that imported leather would be exempted from quarantine processes. In June 2017, the Agricultural Quarantine Agency of the Ministry of Agriculture issued the Decree No. 870/2017 on the List of Prohibited Items and/or Quarantine Restrictions on Exports and Imports. Since the leather sector imports almost 70 percent of its raw material, often resulting in high costs, this new regulation will cut logistics and administrative barriers to accelerate importing raw materials of the export-oriented leather segments in Indonesia, such as footwear.

Exports

Indonesia is in the fifth-largest leather and leather goods exporter in the world after China, India, Vietnam, and Brazil, according to a November 2017 report on Antaranews.com. The leather and leather products sectors (including footwear) are among the 10 highest-earning export commodities for Indonesia, according to statistics published by the Ministry for Industry. Leather, leather goods and footwear products contributed approximately 4.6 percent ($5 billion) in 2016 (latest available), and the number is anticipated to increase 6.5 percent annually, on average.

The leather, finished goods and footwear industries grew 7.4 percent in the first quarter of 2017 (latest available). This growth rate is higher than the non-oil and gas processing industry, which grew only 4.7 percent. The export value of leather and leather finished goods industry reached $162 million and absorbed 192,000 into the workforce.

Based on the 2016 data extracted from the DESA/UNSD, United Nations Comtrade database (latest available), the largest share of exports came from footwear, contributing about $2 billion. The Ministry of Industry also reported that leather, leather goods and footwear was among the fifth largest trade surplus sectors in February 2017, reaching $319.5 million or 20,320 tons in total.

Competitive advantages

Leather goods suppliers in Indonesia consider local availability of raw materials as the sector’s major strength. With the celebration of the Muslim annual feast day, Idul Adha, the large number of cows and goats slaughtered across the country during this event gives the country an abundant supply of leather. However, this opportunity still cannot meet the needs of domestic leather industries, so some suppliers have to import from Australia and China.

Another advantage that buoys the sector is the strong auxiliary industries such as bags and footwear. However, without any main brands, the local leather segment are highly dependent on market trends and tourism. When demand for leather bags rise, the same type of product will then be massively produced. Otherwise, if that market tends to slow, then the industry will switch to other products. For some famous tourist destinations such as Bali and Yogyakarta, this can be an advantage to build their local brands and get recognition from overseas visitors.

Support from the government also buoys the sector. The Ministry of Industry tries to meet industrial demands with workforce supply through vocational education by providing basic industry-related knowledge in classes. This concept has been implemented by a program that has a link and match system between vocational high schools and the industry. The program began in February 2017 in East Java, Central Java, Yogyakarta, West Java, and northern Sumatra, which involved 565 industries and 1,795 vocational high schools.

Challenges

The Indonesia leather goods industry faces a number of difficulties, primarily the unstable supply of raw materials, which results in high material costs. Domestic tanners can only provide 5 million sheets of bovine leather and 20 million sheets of goat leather annually, covering only 20 percent to 30 percent of the needs of the domestic industry. Consequently, around 70 percent of leather materials are imported from abroad. The insufficient supply of leather hampers the production process and results to noncompetitive prices compared with neighboring sourcing hubs.

Based on an interview with a supplier, OSTO, the domestic tannery industry still faces immense challenges due to a lack of raw materials and the means by which to process them. As a result, there is high dependence on imported raw materials, and the exchange rate is very influential on the structure of production costs.

Indonesia leather good producers also find complying with international standards and obtaining certifications challenging. Most local tannery businesses consider international standards for processed leather commodities too expensive. For example, the cost for laboratory tests to examine chemical content requires IDR10 million, which need to be updated every six months. This amount is too high for small and medium enterprises to shoulder. Only around 10% of the leather industries are able to comply with the international standard certificates needed to export goods to Europe and the US.

Price competition is another difficulty faced by the sector. Based on an interview with the OSTO, the abundance of low-cost products made of synthetic leather in Indonesia makes price competition fierce. Synthetic leather products have their own market share and keep expanding as they are considered more affordable alternatives to genuine leather goods.

Competition from neighboring sourcing hubs adds to the pressure. Leather items from China, for one, are marketed at lower quotes than locally made products.

Industry composition

The latest Ministry of Industry data (2013) show 265 companies listed under the leather industry.

Small operations are usually around 500sqm or smaller and have less than 10 employees. Monthly output of these companies usually does not exceed 100 pieces, and they generate less than $10,000 in annual export sales.

With factories ranging reaching 2,000sqm, midsize producers normally have up to 20 workers. Overseas shipments can reach up to 500 pieces and yearly foreign revenue can hit $50,000.

Larger companies, with a workforce of more than 20 and plants exceeding 2,000sqm, can manufacture more than 500 pieces monthly. Annual export sales exceed $50,000.

Supplier location map

The highlighted areas on the map show the locations of the head offices and factories of the leather goods suppliers featured in this report.

Indonesia Leather goods Industry Overview Locations Map

Indonesia Sourcing: Leather goods 2018 Product features

Indonesia Sourcing: Leather goods Suppliers and Products

Indonesia Sourcing: Leather goods 2018

• Bags • Wallets • Footwear • Jackets • Other fashion accessories

This section offers information on how trends in materials, design and manufacturing are impacting prices offered by Indonesia leather goods suppliers.

Buyers can also learn more about the materials used and the common price ranges of certain designs.

Sections


Materials & designsManufacturing & QCPricing
  • Cow and buffalo hide are among the top material options.

  • Other leather types available are sheep-, horse-, snake- goat-, stingray and crocodile skin.

  • The design team is often composed of up to two workers.

  • Sewing, embroidery and gluing are usually done by hand.

  • Up to five employees perform the QC.

  • Machines used are typically imported.

  • Prices vary depending mainly on design complexity.

  • Larger models are generally more expensive.

  • Prices are anticpated to remain the same in the next few months.


Materials & designs

Indonesia leather goods makers mainly use cow- and buffalo hide, and sheep-, horse-, snake- goat-, stingray, and crocodile skin. They are procured from Magetan, East Java, Wonogiri, Central Java, Garut, West Java, Brebes, Central Java, Banyuwangi, East Java, Jayapura, and Papua Boyolali.

According to local cowhide vendors, leather prices increase 30 percent recently, because production costs and quotes of salt used for the tanning process have increased up to 300 percent.

The design team is often composed of up to two workers who create 20 to 30 models monthly. Lead time for samples can take up to two weeks.

Manufacturing & QC

The product steps include cutting (fabric and base materials), sewing and forming, and finishing (trimming excess materials, attaching accessories if needed, labeling and packaging). Sewing, embroidery and gluing are usually done by hand. Meanwhile, cutting, pressing and stamping often utilize machines procured from Germany, China, and Japan.

Up to five employees perform the QC. Items are often checked for sizing, leather quality, cutting integrity, and coloring. Indonesia producers also have to comply with export requirements, particularly from the EU and the US.

Pricing

Quotes are influenced by complexity design, which includes embossing and weaving. Larger items will also be often priced higher than smaller ones. The raw materials used also dictate pricing, particularly imported leather. As the Indonesia leather industry still faces immense challenges due to lack of raw components, there is a high dependence on imported goods, which are more expensive.

Price guide

Price guide: Bags
Less than $10
Cross-body or sling type; synthetic leather; in simple designs and various sizes
$10 to $35
Cross-body or sling type; genuine leather; matte or glossy finishing; in various sizes
More than $15
Cross-body, sling, or messenger type; full grain genuine leather; embossed or patterned finishing; in various sizes

Click image to enlarge.

Indonesia Leather goods product features Typical Components of casual leather goods

Price guide: Fashion accessories
$0.50 to $2
Synthetic leather with metal studs; in plain designs and various lengths

Synthetic or genuine leather; matte or glossy finishes; in various lengths
More than $15
Full grain genuine leather; embossed or patterned finishes; handmade; in various lengths

Indonesia sourcing leather goods product features Typical Component of formal leather goods

Price guide: Footwear
$20 to $50
Casual shoes; synthetic leather; in plain designs and various sizes
$51 to $100
Casual shoes; genuine leather; matte or glossy finishes; in various sizes
More than $100
Casual shoes; full grain genuine leather; embossed, patterned or woven finishes; in various sizes

Click image to enlarge.

Indonesia Leather goods product features Typical Components of casual leather goods

Price guide: Jackets
$20 to $50
Synthetic leather or goatskin; simple designs; in various sizes
$51 to $100
Goat- or sheepskin; inner lining; in various sizes
More than $100
Full grain cowhide; inner lining; patterned or embossed finish; in various sizes

Click image to enlarge.

Indonesia Leather goods product features Typical Components of casual leather goods

Indonesia Sourcing: Leather goods 2018 Supplier survey

Indonesia Sourcing: Leather goods Supplier Survey

Indonesia Sourcing: Leather goods 2018

• Bags • Wallets • Footwear • Jackets • Other fashion accessories

To give buyers first-hand information from active leather goods exporters in Indonesia, we have surveyed the manufacturers featured on this site.

Export pricesExport markets & salesProduct trendsChallenges
  • Suppliers are split between raising and maintaining prices.

  • The government-mandated salary increase is the main reason of companies increasing prices.

  • Majority of companies raising quotes will be capping increases at 5 percent.
  • Seventy-five percent of suppliers are optimistic export sales will increase.

  • Sales are expected to grow up to 10 percent.

  • The Asia-Pacific will be the main export destination for many suppliers.
  • Models with simple and minimalist designs are expected to grow.

  • Improved durability is also a priority for many producers.

  • New product lines and colorful designs are anticipated.

  • Price competition is the main challenge of most suppliers.

  • Material availability is an issue for some suppliers.

  • Labor concerns and obtaining certifications are also major challenges.

Export prices

Quotes of Indonesia leather goods are evenly split between those who will maintain prices in order to remain competitive, and those who will increase quotes over the next six months. Among those who indicated they will adjust prices, one-half said they will raise quotes minimally at 5 percent. One-quarter said that they would lift prices by 11 percent to 15 percent.

The main factor for the increase is the government-mandated salary increase, which requires employers to raise minimum wages 8.7 percent this year. The exact percentage varies between provinces and regions, depending on their economic growth. Increasing material prices are also forcing leather product makers to adjust quotes.

Indonesia Leather goods Survey Export Prices

Export markets & sales

Majority of respondents have a positive outlook on export sales for the next 12 months, with three-fourths anticipating overseas shipments to surge up to 10 percent. Most of the expected orders are repeat orders from large clients.

Meanwhile, 13 percent of respondents expect foreign shipments to remain the same in the coming year, mostly because of the growing domestic demand for leather footwear. Thus, Indonesia manufacturers are keener to focus on the local market.

Most overseas sales over the next 12 months are expected to be coming in from the Asia-Pacific region, followed by the EU and the rest of Europe.

Indonesia Footewar Supplier Survey Export Forecast

Among surveyed companies, 50 percent will be focusing on simple and minimalist designs in line with international trends and buyer preferences. One-fifth of the surveyed suppliers will focus on improving durability and fit, and will be incorporating more genuine leather into their products instead of synthetic types.

Some leather good suppliers will expand into new product lines. Others plan to expand their selections by offer colorful patterns and designs, and will be experimenting with dyeing leather in vibrant colors.

Challenges

Rising raw material costs and price competition were cited by survey respondents as the primary challenges they will be facing over the next six months. As the local demand for leather goods grows, more producers are targeting both midrange and high-end markets, and competition has been fierce.

Indonesia Leather goods Survey Key Findings

Retaining skilled workers is another problem cited by surveyed companies. With the expansion of the leather industry, it is easier to find leather craftsmen than artisans. Craftsmen usually create goods for mass production based on samples, while artisans are more specialized and can produce highly customized designs.

Indonesia Sourcing: Leather goods 2018 PDF download

Indonesia Sourcing: Leather goods

Indonesia Sourcing: Leather goods 2018

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Supplier & products

Sections


  • Products
  • Indonesia leather goods suppliers

Industry overview

Sections


  • Highlights
  • Competitive advantages
  • Challenges
  • Industry composition
  • Indonesia leather goods suppliers

Chart


  • Leather goods exports
  • Supplier locations map

Product features

Sections


  • Highlights
  • Materials & designs
  • Manufacturing & QC
  • Pricing
  • Price guide
  • Indonesia leather goods suppliers

Supplier survey

Sections


  • Highlights
  • Export prices
  • Export markets & sales
  • Product trends
  • Challenges
  • Indonesia leather goods suppliers

Chart


  • Export prices
  • Export forecasts
  • Key findings

Indonesia Sourcing: Leather goods 2018 Supplier list

Indonesia leather goods suppliers

Click company names below marked Active to view verified suppliers and products featured on GlobalSources.com.

Suppliers featured on
Supplier status
BagsWalletsFootwearJacketsOther fashion accessories
Aldo Leather
Active  
Bebo Indonesia
Active  
Braow Goods

Active
Cordelia
Active    
CV Karunia Multiniaga
Active     
CV Karya Anjani Nusantara
Active    
Indoto Shoes
Active     
Javatic Leather Active    
Jaya Langgeng
Active   
Koesoema Bags
Active
Look Footwear Active     
Osto
Active   
PT Panca Media
Active    
Simple Leather
Active  
Suparman Leather
Active
Worklife
Active