Two Korean-owned, Indonesia-based factories, PT Dong Joe Indonesia and PT Spotec, which produced footwear for adidas and Reebok, closed last year following financial difficulties and the owners leaving the country, according to sources at adidas. Both suppliers were in a precarious financial state and were unable to obtain further credit with the banks, resulting in the ultimate closure of the factories.
Due to the closure of the factories, adidas had a short term impact on its ability to deliver Reebok footwear product, according to the sources. Some orders were already dual sourced and the other orders were switched to the second source. All remaining products were reallocated to other suppliers in Indonesia, Thailand, Vietnam and China.
The source commented that adidas' primary concern was and is for the workers and their families. As a result, the company is liaising with the trade unions and the Indonesia government and has reached out to other footwear suppliers in Indonesia to ask if they can offer employment in their factories. In addition, adidas is providing humanitarian aid such as medical care.
