Domestic Shoe Industry Hit by Raw Material Shortage

EghtesadOnline: Domestic shoe production has declined by over 70%, the head of Handmade Shoemakers and Sellers Union said, as raw materials needed by the producers have not been cleared from the customs due to foreign currency fluctuations.

News ID: ۷۸۳۷۴۹

19 August 2018

Rasoul Shajari added that 30% of raw materials in the shoe industry are imported.

Many shoe production units have gone out of business due to lack of raw materials, Mehr News Agency reported.

A stash of shoe raw materials, including glue, soles, heels and shoelaces, hoarded in a warehouse in Tehran’s Kahrizak District in Rey County was confiscated by ‘Tazirat’ Organization (a judiciary-affiliated oversight entity dealing with trading offenses) on Monday last week, Financial Tribune reported.

According to a producer, accompanying the inspection officers, the confiscated raw materials are sufficient to produce a year’s supply of shoes in the domestic market.

The warehouse belonged to an importer who had received subsidized foreign currency to purchase the goods, the Persian news website Fararu reported.

Shoe producers in Tehran Bazaar had, over the past few days, staged protests against the shortage of raw material.

Monday’s discovery is part of efforts by a taskforce called “Intensified Fight Against Hoarding and Stashing” newly founded on the order of Minister of Industries, Mining and Trade Mohammad Shariatmadari last month.

Iran is one of the oldest producers of footwear, yet the industry is one of the most neglected.

Ali Lashgari, the head of the Association of Managers and Experts of Iranian Shoe Industry, told Financial Tribune last year that Iran is the biggest producer and consumer of footwear in the Middle East.

About 95% of active businesses in Iran’s shoe industry fall under the category of small and micro businesses.

By definition, enterprises run by 50 workers or less are considered small-sized, according to Iran’s Small Industries and Industrial Parks Organization.

A glance at the prevailing condition of footwear enterprises in terms of size reveals that 58% of all units in this industry have fewer than 10 employees.