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LISTED COMPANY - JAKARTA. The national footwear industry is facing challenges. PT Sepatu Bata Tbk (BATA), a leading shoe manufacturer, has shut down its factory in Purwakarta, West Java.
Recently, a video was uploaded on the social media platform Twitter (X) by a user named @never_alonely, depicting the closure of the BATA factory in Purwakarta, West Java.
In the tweet, the user reported that the BATA factory in Purwakarta ceased production on April 30, 2024, and the BATA management made the announcement public on Friday (5/3). The closure of the factory is due to a decrease in product demand, amid stiff competition and shifting consumer tastes.
In the video, hundreds of BATA factory workers can be seen leaving the factory premises. Faintly, one worker can be heard saying, "Goodbye, Sepatu Bata".
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Meanwhile, in a disclosure of information on the Indonesia Stock Exchange (BEI), BATA management explained that the decision to cease production activities at the Purwakarta factory was based on a Board of Directors' decision dated April 30, 2024, which had previously been approved based on the consent of the Board of Commissioners' decision on April 29, 2024.
BATA has made various efforts over the past four years amid losses and industry challenges due to the COVID-19 pandemic and rapid changes in consumer behavior. The company could not continue production at the Purwakarta factory due to a decline in consumer demand for the types of products made at the factory and the factory's capacity far exceeded the sustainable needs that could be obtained from local suppliers in Indonesia.
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"With this decision, the company cannot continue production at the Purwakarta factory," wrote Hatta Tutuko, Director & Corporate Secretary of Sepatu Bata in the disclosure of information, Friday (5/3).
Furthermore, this decision is the best course of action based on a comprehensive evaluation and agreement of the relevant parties and aims to streamline BATA's operations.
"We are committed to ensuring a smooth transition for all our employees and partners affected by this change," he concluded.
As a note, BATA recorded net sales of IDR 609.61 billion in 2023, down 5.26% year on year (YoY) compared to the previous year of IDR 643.45 billion.
BATA also experienced an increase in net loss attributable to the parent entity by 79.65% YoY to IDR 190.29 billion in 2023, from the previous year of IDR 105.92 billion.
