Japan plans offshore shoe factories

16 October 2006

Japan is planning to set up footwear factories in Thailand in a bid to avoid the risks associated with having China as its only source of imports, according to the Export Promotion Department. Director-general Chantra Purnariksha said Japan was considering several countries in Asia in which to establish the factories, including Thailand, as part of the government's aim of trying to reduce the flood of imports from China. The move would also reduce the risk of a supply shortage if imports from China were delayed. Chantra said the Japanese government would form joint-ventures with Thai partners that would create a win-win situation for both sides. 'The investment will increase Thailand's footwear-export industry as well as its share in the market', she said. The commerce ministry reported the total value of footwear exports to Japan reached US$3.9 billion last year. Japan's imports from China grew 6.2% to $1.64 billion in the first five months of this year, while Thailand's exports to Japan increased 10.8% to $28.9 million. However, Thailand only has 1.8% of the Japanese market. The imminent signing of the Japan-Thailand Economic Partnership Agreement will also help increase Japanese investment in Thailand.

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