Officially Closed, Check Out Sritex's Journey to Becoming a Textile Giant in Indonesia

Kapanlagi.com - PT Sri Rejeki Isman Tbk (SRIL), better known as Sritex, once stood grandly as one of the giants of the textile industry in Indonesia. Established in 1966 in Solo, this company achieved remarkable success by expanding into export markets and even being trusted to produce military uniforms for NATO and several other countries. However, this glorious journey must now end with the scheduled closure of operations on March 1, 2025.

The crisis that hit Sritex was not a sudden event. Over time, escalating financial problems, combined with failures to pay debts, forced the company to announce its bankruptcy status. As a result, thousands of workers were left without their livelihoods, and many began to question how a company of Sritex's caliber could fall so deeply.

What was the journey of Sritex, which was once so glorious? Let’s explore its story, as reported by Kapanlagi.com from various sources, Wednesday (5/3).

1. The History of Sritex's Success: From Pasar Klewer to the Global Market

Sritex, now known as a giant in the textile industry, began its inspiring story in 1966 under the leadership of H.M. Lukminto with the simple name UD Sri Redjeki. Starting from a small booth in Pasar Klewer, Solo, selling canvas fabric to local batik factories, Lukminto saw a golden opportunity in the textile industry and partnered with his brother, Isman Jianto, to establish their first factory in 1968.

With a capital of Rp5 million and an initial production capacity of only 600-700 meters of fabric per month, they never expected that ten years later, this venture would skyrocket, leading to a name change to PT Sri Rejeki Isman in 1978.

The construction of the first weaving factory in 1982 marked the beginning of massive expansion, and by 1994, Sritex secured a monumental contract to produce military uniforms for NATO and the German army, placing it at the pinnacle of the global textile industry. In the face of the 1998 monetary crisis, Sritex demonstrated extraordinary resilience with growth reaching eight times its initial capacity.

2. Steps of Expansion and Great Ambitions of Sritex

In 2013, Sritex confidently stepped into the industrial world by launching its initial public offering (IPO) on the Indonesia Stock Exchange (IDX) with the code SRIL, a strategic move that opened up greater funding opportunities to expand production.

Not satisfied to stop there, in 2018, the company made a breakthrough by acquiring two industrial giants, PT Primayudha Mandirijaya and PT Bitratex Industries, to increase production capacity and strengthen its supply chain in the textile market, both nationally and globally.

Sritex has also relentlessly expanded its export wings, with flagship products such as finished fabrics, yarn, and military uniforms that have been recognized for their quality by various countries around the world.

3. The Beginning of the Crisis: The Impact of the Pandemic and Mounting Debt

A storm hit Sritex in 2020 when the Covid-19 pandemic shook the world, although the company played a significant role by producing 45 million masks in a short time.

However, the plummeting global demand left Sritex entangled in serious financial difficulties, leading to their failure to pay a syndicate loan of US$350 million in March 2021, which triggered a Suspension of Debt Payment Obligations (PKPU) lawsuit from creditors. Although they managed to escape PKPU status in January 2022 thanks to a peace agreement, financial pressure did not subside.

Ultimately, in June 2023, Indo Bharat Rayon sued Sritex due to the cessation of debt payments amounting to Rp127.9 billion, and the situation worsened until the Supreme Court judges rejected Sritex's cassation request on December 18, 2024, marking a dark chapter in the history of this company.

4. Peak of the Crisis and Bankruptcy Decision

In facing the mounting debt storm, Sritex recorded a staggering total liability of US$1.61 billion or approximately Rp24.45 trillion in the third quarter of 2024. The situation became even bleaker with an equity deficit of US$1.22 billion, adding to an already heavy financial burden.

Tragically, from January to February 2025, more than 10,900 employees were forced to face layoffs. The peak occurred on March 1, 2025, when this once-proud company officially ceased all its operations, leaving a dark mark on the textile industry.

5. Impact and Lessons from the Sritex Case

The bankruptcy of Sritex shook the national textile industry, as this once-thriving company was forced to shut down its operations due to mismanagement of finances and unbearable external pressures.

Now, thousands of workers who lost their livelihoods must struggle to find new opportunities amid increasingly fierce competition. The government has also acted quickly by providing assistance in the form of severance pay and unemployment guarantees for the affected workers.

The story of Sritex's downfall serves as a valuable lesson that company growth must be supported by solid financial risk management and the ability to adapt to dynamic changes in the industry.

6. FAQ

1. What caused Sritex to go bankrupt?

Sritex faced financial difficulties due to defaulting on debts, the pressures of the Covid-19 pandemic, and legal claims from several creditors.

2. How many workers were affected by layoffs?

More than 10,900 workers from various Sritex subsidiaries were laid off in January-February 2025.

3. Does the government provide assistance to workers affected by layoffs?

Yes, the government, through the Ministry of Manpower, guarantees workers' rights to receive severance pay and Job Loss Insurance (JKP).

(kpl/rmt)