China-like steps

The challenge was to compete against cheaper and relatively good quality imported shoes. And Marikina-raised Mark Lee thinks he has the solution.

"It’s called SikapMo Corp. and it is a consolidated effort of the private and public sector to match the price and quality of imported shoes," he said.

SikapMo is capitalized at P6 million, broken down into P5 million from Lee, Natasha general manager Mahar Jardiolin, and other incorporators and a P1 million loan at 9% interest per annum from Marikina Rep. Del de Guzman. The company’s shoe brand, Marquina will be launched in June this year.

"We pooled our resources to train shoemakers in the modern techniques of shoemaking. We developed our own styles with the help of the Marikina government," said Jardiolin, who is president and chief executive officer of SikapMo.

School project

SikapMo was the result of a study of the ailing shoe industry made by Lee with the support of De La Salle University and the Philippine School for Business Administration in the Philippines and the California State University-Hayward in the United States. Called the Shoe Evolution project, it was entered into the US-based Students in Free Enterprise or SIFE competition, which was held in Dumaguete early this year. (As a follow through, the city government of Dumaguete will hold sometime this year the Shoe Evolution International Conference, which hopes to jump-start the rehabilitation of the local shoe industry).

"The Philippines used to export shoes to other Asian countries in the 1980s until China began mass-production.Because they are mechanized and they use modern technology equipment, they are able to produce in huge volumes in shorter periods of time at cheaper price," said Lee.

As more footwear is imported, local manufacturers become increasingly vulnerable because of their adherence to traditional methods of production. Out of the $35 billion exported by the Philippines last year, shoes accounted for only 0.07%. In 2001, shoes accounted for 0.11% of total exports.

The exported shoes were manufactured rubber shoes and leather shoes of foreign labels.

Mechanizing

"When you mechanize and do away with antiquated labor practices in shoemaking, you are able to raise efficiency and productivity levels by 100%. This is done by specialization ," said SikapMo vice-president and concurrent general manager of Monsignor Shoes Armand Javier said. "In the old practice, only one person performs the first to the last steps of shoemaking. In the new and more efficient practice, the tasks become more specialized so that the shoemaker becomes adept at one task, increasing his productivity."

As a result, the cost of labor is reduced by at least 20% and is passed on to the consumer. For example, Marquina shoes will be able to sell its men’s line at between P800 and P1,200 instead of the usual price range of P1,000 to P1,500 a pair. Ladies’ shoes currently selling at between P500 and P1,000 could be brought down to between P400 and P800, depending on whether it is a pair of sandals or a pair of closed shoes.

SikapMo is targeting a production run of 100,000 pairs of shoes a month that will create 2,000 jobs in Marikina. Payback is expected within a year.