TBS Group signed an MoU with Central Java Governor Ahmad Luthfi on October 30 to invest about $30 million in an industrial production complex in the Indonesian province, a project expected to create roughly 10,000 local jobs. The footwear line is designed for 8-10 million pairs a year, with a first phase of 4-5 million pairs. The Vietnamese company surveyed India, Bangladesh and Indonesia before choosing Central Java, where it began trial operations in 2025, shipped first orders in May 2026 and opened officially on July 16, 2026. That plant targets $18 million in revenue, 2 million products and 1,600 workers by end-2026, with Vietnamese staff at 1.1%.
According to www.vietnam.vn, Vietnamese footwear maker TBS Group signed a memorandum of understanding on October 30 with Central Java Governor Ahmad Luthfi to invest roughly $30 million in an industrial production complex in the Indonesian province, a plan expected to employ about 10,000 local workers.
The agreement was reached during a working session between TBS Group and the Central Java provincial delegation focused on investment cooperation in industrial manufacturing. The two sides also discussed extending collaboration beyond footwear into other industrial sectors, according to the report.
For footwear specifically, the new complex is designed for annual capacity of 8-10 million pairs, with the first phase targeted at 4-5 million pairs per year. The plan places the project among the larger foreign manufacturing commitments announced in Central Java this year.
Site selection followed multi-country review
Before settling on Central Java, TBS Group said it surveyed investment environments in several countries, including India, Bangladesh and Indonesia, to assess policy mechanisms, labor supply, culture and production conditions. The company said the comparison informed its decision to locate the new complex in the Indonesian province.
Since 2025, the company has been running trial operations at a factory in Central Java, shipping its first orders in May 2026 and holding an official opening on July 16 of the same year. TBS Group said the plant has already built a local management team and trained technical staff.
By the end of 2026, that facility is projected to reach revenue of $18 million, output of 2 million products and a workforce of about 1,600 people, with Vietnamese personnel accounting for just 1.1% of the total.
Central Java courts labor-intensive investors
Governor Ahmad Luthfi said Central Java is prioritizing investment in labor-intensive sectors such as footwear, leather goods, bags and garments. The province has prepared sites in Jepara, Batang and several industrial parks to receive investors, he said.
According to Luthfi, Central Java offers an abundant labor pool, competitive costs and workers across multiple skill levels. The province is also assisting companies with investment procedures and licensing, and offers incentives including tax exemptions, reductions and deductions for investors.
“This is the basis for Vietnamese enterprises to expand operations in Central Java and build long-term cooperative relations with the locality.” — Ahmad Luthfi, Governor of Central Java
Luthfi said Vietnam and Indonesia, and Central Java in particular, share similarities in human resources and conditions for production development, pointing to those commonalities as a foundation for deeper ties between Vietnamese businesses and the province.
TBS keeps R&D at home, shifts production abroad
Nguyen Duc Thuan, chairman of TBS Group’s board of directors, said Vietnamese companies need production and business networks across multiple countries rather than concentrating only on the domestic market if they want to participate more deeply in global value chains.
He said TBS Group maintains its core operations in Vietnam, including research and development, its operations center and supply chain management, while extending the manufacturing portion abroad.
“We expand the production portion abroad to create an additional channel for brands with large order volumes. They are then willing to share orders and do not need to develop further suppliers. That is how we build a solid supply chain.” — Nguyen Duc Thuan, Chairman, TBS Group
For the footwear sector, expanding the production footprint also helps companies access labor, raw materials and logistics systems in regional markets, according to Thuan.
Industry group sees room for outbound investment
Phan Thi Thanh Xuan, vice chair and secretary-general of the Vietnam Leather, Footwear and Handbag Association (LEFASO), said the Vietnamese footwear industry has accumulated substantial production experience, management capability and experience working with international brands over more than 40 years of development.
According to Xuan, some companies in the sector now have sufficient resources to research investment in overseas markets. Building factories in other countries can help them expand scale, use local production conditions and gradually form an international operating network.
“With the capabilities accumulated in recent times, Vietnamese enterprises can confidently invest in production factories abroad to expand scale.” — Phan Thi Thanh Xuan, Vice Chair and Secretary-General, LEFASO
Multi-sector group with seven R&D centers
TBS Group describes itself as a multi-sector group active in footwear and bag manufacturing, real estate and industrial infrastructure, ports and logistics, and trade and services. In manufacturing, the company operates 7 research and development centers and takes part in designing and developing products for international brands including Skechers, Decathlon, Coach and Kate Spade.
The Central Java project marks the group’s latest move to pair domestic R&D and supply chain control with offshore production capacity, a structure the company says is intended to keep large brand clients supplied without requiring them to onboard additional vendors.
Source: vietnam.vn
Compiled from international media by the SCI.AI editorial team.
