Sole Bata factory in Indonesia closes as company suffers 4th consecutive year in losses
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Sole Bata factory in Indonesia closes as company suffers 4th consecutive year in losses

Bata closes last factory in Indonesia

Popular shoe brand Bata has closed its only Indonesian factory, according to reports.

The company, which has a long history in Indonesia and is its oldest shoe manufacturer, had been struggling with a fourth consecutive year of losses.

However, its shops do not appear to be affected, with staff saying they receive shoe imports from other countries.

Source: Google Maps

Bata closes last factory in Indonesia amid losses

On 2 May, PT Sepatu Bata Tbk closed its factory in Purwakarta, West Java, after 30 years, reported The Jakarta Post. 233 employees lost their jobs as a result.

The company made a disclosure to the Indonesia Stock Exchange on 30 April that the board of directors decided to halt production activities at the factory in Purwakarta.

Even though Bata has 27 factories in 20 countries globally and more than 5,000 stores in over 90 countries, it is suffering losses in Indonesia.

Bata’s losses were partly attributed to declining demand as well as the Covid-19 pandemic.

In 2021, Bata closed 50 stores due to the pandemic, stated multiple reports including Kompas.tv.

Source: Bisnis Pekanbaru

According to Bata’s Director and Corporate Secretary, Hatta, the company could no longer sustain production at the Purwakarta shoe factory due to declining customer demand for the products manufactured there.

“The production capacity of the factory far exceeds the supply from local suppliers in Indonesia,” he explained, as quoted by Jakarta Globe.

As of 31 Dec 2023, Bata saw losses of 190.5 billion rupiah (S$16 million), compared to 106.1 billion rupiah (S$8.9 million) in the previous year.

Bata’s net sales were recorded at 609.61 billion rupiah (S$51.3 million) in 2023, down from 643.45 billion rupiah (S$54.25 million) in 2022.

Declining sales not indicative of overall Indonesia economy: Jokowi

On 7 May, President Joko Widodo stated that the closure was due to different reasons.

Jakarta Globe quoted Widodo — popularly known as Jokowi — as saying: “When a factory closes, it’s due to various reasons like efficiency or losing out to new products. Many factors are at play.”

But he emphasised that the factory’s closure isn’t reflective of Indonesia’s overall economic condition.

One of the 233 employees who lost their jobs said that the retrenchment saddens her as she has “no other source of income”, especially as a mother.

She added that she had worked for more than 20 years and is the main provider for her children, who are still in school.

“I hope to find a new job soon, and I hope to receive the best severance pay,” she said.

Bata popular in Singapore

Bata was founded in 1894 by Czech shoe entrepreneur Thomas Bata. Thereafter, the brand began collaborations with the Dutch East Indies in Indonesia.

Bata eventually set up factories in the country, all of which are now gone. However, it still has 435 stores in Indonesia.

Meanwhile, Singapore currently has more than 40 stores, according to Bata’s website.

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Featured image adapted from Google Maps. Image for illustration purposes only.

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