Bata Halts Production, BKPM Says Shutdown Not Linked to Investment Climate
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JAKARTA, Investortrust.id — The Ministry of Investment and Downstreaming’s Deputy for Investment Promotion, Nurul Ichwan, has clarified that PT Sepatu Bata Tbk, or BATA, has stopped production not because Indonesia’s investment climate is unfavorable, but due to intensifying competition in the footwear industry.
Ichwan explained that the company, which has been listed on the Indonesia Stock Exchange since March 24, 1982, was struggling to keep up with the evolving global footwear market. The local manufacturer, 82.01% owned by Bafin (Nederland) BV, decided to halt production amid growing pressure from more agile and innovative competitors.
“The footwear industry is extremely competitive, especially with new and existing players pushing continuous innovation,” Ichwan said on Saturday, Oct 11, 2025, during the Indonesia International Sustainability Forum (ISF) at the Jakarta Convention Center in Senayan.
BATA officially removed “footwear manufacturing for daily needs” from its line of business after an Extraordinary General Meeting of Shareholders (EGMS) on Sept 25, 2025. Long before that, the company had ceased operations at its Purwakarta factory on April 30, 2024.
According to Ichwan, the global footwear industry has undergone major transformation. Most international shoe brands no longer produce their own products but focus instead on research, design, and quality control, while outsourcing production to specialized manufacturers.
“Nowadays, companies put more emphasis on designing, improving material quality, and ensuring comfort and health aspects of the shoes,” he noted.
He added that Bata’s legacy model—maintaining in-house manufacturing—had become increasingly inefficient compared with the outsourcing model that dominates the modern market. “Bata continues to make its own shoes, and that business model is no longer competitive,” Ichwan said.
The BKPM deputy stressed that Bata’s shutdown should not be interpreted as a signal that Indonesia’s investment climate has deteriorated. “We should not jump to conclusions. Just because a company shuts down here doesn’t mean Indonesia is unfriendly to investors. This is purely a business-to-business issue,” he stated.
While acknowledging that the closure might have short-term labor impacts, Ichwan expressed optimism that the sector still holds strong growth potential, driven by new investment opportunities emerging in Indonesia’s footwear and apparel industries.