Suppliers support Footwear Promotion Law but request clarifications

Following a detailed statement with information about the composition of the supplier segment within the footwear chain, the industrial entity has requested clarifications and definitions regarding certain points of the initiative in order to prevent situations that could impact this segment.

They are related to the importation of materials and components, and their percentage within the content of footwear manufactured in the country.

The practice is well known, where many establishments import a significant portion of components for production and become mere assemblers, without the need to rely on domestic suppliers.

The supplier chamber -CAIPIC- does not reject imports of materials and components that contribute to the development of the domestic industry, but rather seeks definitions and regulations for access quotas based on factory categories and product characteristics, in accordance with local production structure.

The aforementioned bill creates the "Local Industry Promotion and Footwear Local Value Integration Program" with the aim of "establishing predictable and progressive parameters in the Composition of the Origin of the National Footwear Offer."

At the end of the report, the supplier entity included comments on the following points that are part of the bill:

TYPES OF FOOTWEAR

It points out that there are no distinctions between the different types of footwear variants and that they are imprecise. Additionally, significant disparities in the domestic content of each type of product are observed.

CATEGORIZATION OF COMPANIES

The separation of companies is not as structured in reality, as an establishment can produce footwear by importing unassembled parts and pieces, while also importing finished footwear. Alternatively, they may have a mix of products made with domestic parts and imported finished footwear. Regarding this point, it is unclear how the table would be applied.

MINIMUM NATIONAL COMPONENT

It emphasizes that it is unclear which type of company should comply with the MNC -Minimum National Component- (companies b, c, or d). The national content with which the progressive scale begins starts from an extremely low floor and does not coincide with the current reality of the sector, promoting the reversal of a virtuous process in terms of generating local added value. Moreover, the original project's formula was incorrectly written (numerator and denominator appear similar) and has been removed from the bill. According to CAIPIC, it should be included in the Law.

INVESTMENT INCENTIVES FOR NEW SUPPLIERS

It refers to the wide variety of companies that are already producing a significant amount of parts and components. In the case of benefiting only "new" companies, their needs and investments would not be supported by this project. At the same time, it requests that other types of products not initially covered in the bill (chemicals, packaging, adhesives, cardboard, trimmings, buckles, etc.) should be included. Although it mentions that they have been added in the new version of the bill.

In conclusion, the supplier chamber stated: "Our entity supports the spirit and objectives of the Bill, understanding the importance of having a law that protects the value chain's development achieved in recent years. On the other hand, we also believe that it is necessary to continue providing our perspective so that the bill considers the investment and employment efforts made by the companies that form the chamber, which are currently working and producing supplies, parts, and components for the footwear value chain."

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