Tuesday, November 07, 2006

Adidas Group suppliers close

Business and Investment - November 03, 2006
The Jakarta Post, Jakarta

The Adidas Group, which produces such brands as Adidas and Reebok, said Thursday that three of its Indonesian suppliers producing footwear primarily for Reebok had ceased, or would cease, operations in the near future, leaving up to 18,000 workers unemployed.

The announcement confirmed a Thursday report in The Jakarta Post saying that 6,500 workers of an Adidas Group supplier had been out of work since its owner's sudden departure from the country.

In a media statement sent to the Post,, the group said that two suppliers, PT Dong Joe Indonesia (DJI) and its sister firm, PT Spotec, had decided to close down their factories, located in Tangerang, late last month due to financial difficulties and (in the DJI case), the departure overseas of its owner.

The two factories employed some 10,000 workers.

A third company, PT Tong Yang Indonesia (TYI), which employs some 8,000 workers, is currently winding down production.

According to the statement, the owner of TYI has advised the Adidas Group that once current orders had been filled, the firm, located in Bekasi, would close for several months to allow it to restructure and secure new financing.

"We are concerned for the workers," said William Anderson, the Adidas Group's social and environment affairs head in Asia.

"In addition to liaising with the trade unions and government, we have reached out to other footwear suppliers in Indonesia to ask if they can offer employment in their factories."

He gave assurances that the closures were not part of any planned consolidation of suppliers by the group, adding that it remained committed to Indonesia.

"Despite the recent events, the Adidas Group remains fully committed to sourcing products from Indonesia."

The group has been manufacturing athletic footwear under the Adidas and Reebok brands in Indonesia for about 20 years.

Indonesia is currently the second largest manufacturing base for the group, with more than 50 factories manufacturing its footwear and apparel products.



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