Ipoh has been known to produce a variety of iconic products, among them pomelo, ground-nut, white coffee, Hiong Piah (biscuits) and bean sprouts, but not many know it is also the biggest shoe producer in the country.
There are about 500 shoe-makers in the city. Started as cottage industry, they now account for RM650 million of the nation’s RM1 billion annual sale of footwear. This fact is prompting the Perak Government to plan a “shoe city” for the promotion of their products.
Century Old Cottage Industry
According to the Chairman of the Perak Footwear Industry Association (PFIA), Mr Tham Kam Kee, the association has close to 500 registered members who contribute to the industry as manufacturers, contract manufacturers, wholesalers and material suppliers. The majority of them are located between Menglembu and Lahat. Interestingly, this area has been making shoes for close to 100 years. It started as a cottage industry where manufacturers would deliver piecemeal material to part-time home workers and subsequently collect it to the main premises to be assembled into finished product. The products manufactured by them range from men’s and ladies’ casuals, sandals to safety shoes. The brands include Bonia, Carlo Rino, Alena and Charles and Keith.
Recently, Ipoh Echo joined a team from the Ministry of Trade and Industry to visit some of these shoe factories. The tour was arranged by Tham. Our first stop was a “cottage factory” located at Bukit Merah. From the outside, it was a typical house in a new village, until you stepped through the front door. The interior was well lit and seated in the hall were six foreign workers going about their specialized jobs be it drawing the outline on the material, or cutting and piecing the cut material together. At the back of the house was another batch of workers who would glue and attach the parts of a shoe before pressing it together to become a finished pair. The area was well ventilated. Undoubtedly a substantial amount of shoes would be produced here daily. Generally the work environment was clean and not noisy.
We were informed that the shoes produced by this sub-contractor, Soon Sing Shoes Manufacturer were branded under names like Bonia, Carlo Rino and Alena and was meant for the domestic market.
The premise was operating as a factory but because it is located in a residential area a license cannot be issued. The second factory was Reveya Enterprise Sdn Bhd at Pengkalan Industrial Estate approximately 5km away. The production set up was similar to the cottage factory except that it was in an industrial setting. It complied with all requirements and is licensed. According to its managing director SP Woo, his factory employs all local workers. Reveya produces its shoes for the Singapore footwear brand of Charles and Keith and is 100% exported. A check on Charles and Keith website indicates that their shoes are retailed in 25 countries through 180 outlets.
According to Tham, “of the 500 association members close to 40% are not licensed because they are still operating from their homes. The industry in the Kinta Valley is almost 100 years old and started as a cottage industry.
Up till the early eighties the cottage players were licensed. It was only when the State Government set up industrial estates and wanted these cottage players to move that their licenses were held back. It was only the cottage players that prospered and achieved the economies of scale who could afford to shift to the industrial estates”.
Interestingly the industry has been around for so long but its contributions had never been recognized till last year when Menteri Besar Datuk Seri Zambry Adbul Kadir came into office. All this while the association had been working alone and quietly promoting its products. A check with the State Economic Planning Unit (UPEN) to identify the amount of contribution from the industry to the state was not available as it had been grouped together with the other industries.
Nevertheless UPEN is now reviewing the industry as a whole to regulate it. It is also considering setting up a zone where the cottage industries are located to support them with the necessary infrastructure.
According to Tham the industry last year saw a downturn of business by as much as 20%. He attributed the reasons to the global downturn and possibly to the import of cheap footwear products from China.
Acknowledging that it was only recently that the industry was recognized, he said it would help the industry in a big way if the government provides incentives such as reduced tax and relaxing the regulations to apply for foreign labour.
Tham explained that the shoe industry is labour intensive. The foreign labour being employed by the industry has been with them for 5-10 years. These workers after a period of time are classified as highly skilled, performing tasks such as cutting material to size. Due to the quota requirement, these workers have to leave the country after a specified time and this off-time would cause a production hiccup.
The granting of licenses to the cottage players too will help greatly as it would encourage them to expand their existing businesses. Tham acknowledged that the offer by Zambry to help expand their business and promote their product was most appreciated. He added that the concept of setting up “Shoe City” to house the various manufacturers under one roof and exhibit their products would greatly help the industry players as it would be a one-stop centre for foreign buyers to view their products. The views of Tham are similarly echoed by Dato’ Gan Tak Kong, the Perak FMM Chairman stating that “the industry has a lot of potential but it has to be more organized and aggressive in its marketing. The issues of the industry should be viewed in detail with a long term solution in mind as foreign investors have indicated their interest in this sector.”