Bankruptcy of Textile Giant Sri Rejeki Isman – Challenges Faced by the Textile Industry
Although it wasn’t a big surprise (as the Indonesia Stock Exchange had already suspended trading of the company’s shares since May 2021), it was still shocking to read that Indonesian textile giant Sri Rejeki Isman (Sritex), which is one of the older generations of companies in Indonesia, was officially declared bankrupt by the Semarang City Commercial Court on 23 October 2024.
Sritex, founded in 1966 as a traditional trading company in Solo (in Central Java) by H.M. Lukminto (also known as Le Djie Shin who had close links to Indonesia’s second president, Suharto, and thus won various government tenders during the New Order period), managed to expand into a vertically integrated leader in Indonesia’s textile industry. As such, Sritex also plays a significant role in the Indonesian economy. For example, in its 2023 annual report it was written that the company employs around 15,000 (permanent) employees (although this number is estimated to have fallen to slightly over 14,000 at the time of writing due to lay-offs), including the employees at its four subsidiaries: Sinar Pantja Djaja, Bitratex Industries, Primayudha Mandiri Jaya, and Golden Legacy Pte Ltd.
However, another 50,000 (freelance) workers and entrepreneurs (mostly involving micro and small entrepreneurs) are believed to be (to a certain degree) dependent on textile deliveries or textile supplies from Sritex, and will therefore also be affected in case Sritex has to close its doors permanently.
In the years (and decades) after its establishment, the company developed printing and weaving factories to tap four production lines (spinning, weaving, finishing and garment). The company also became known for its military uniform exports (with customers including: Germany and the North Atlantic Treaty Organization, NATO), while Sritex also attracted customers from large and modern retailers, such as H&M and Walmart.
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