PT Sri Rejeki Isman (Sritex), Indonesia’s leading textile manufacturer, shut down its factory on March 1st, 2025, due to severe financial struggles. This closure has triggered a major crisis, affecting thousands of workers and shaking the country’s textile industry.
Mounting debt, prolonged legal disputes, and mass layoffs ultimately led to its downfall. With investors now showing interest, Sritex may see a transformation. This article explores the reasons behind the Sritex factory closure and what lies ahead.
The Financial Crisis Behind the Sritex Factory Closure
Sritex’s financial troubles began in 2021 when it struggled to repay debts totaling $350 million. The company filed for Debt Payment Suspension (PKPU) as creditors pushed for repayments. This financial strain led to multiple legal disputes, further worsening the company’s stability.
In 2024, bankruptcy proceedings escalated as creditors demanded asset liquidation. PT Bank QNB Indonesia Tbk played a significant role in filing the bankruptcy lawsuit, which ultimately led to the court’s ruling against Sritex. The financial crisis, compounded by poor management decisions, resulted in the company losing control over its assets and operations.
Legal Battles and Bankruptcy Declaration
The legal issues surrounding Sritex intensified when courts ruled in favor of its creditors. After lengthy proceedings, the court declared the company bankrupt, forcing asset liquidation to repay outstanding debts. The appointed bankruptcy curator, Nurma Sadikin, confirmed that Sritex could undergo rebranding if a new investor steps in.
“No (not Sritex), as I mentioned earlier, with a new investor, we don’t know yet which PT we will decide on during the negotiation stage,” Nurma stated as reported by Kompas. This means the company’s future identity remains uncertain as negotiations continue.
Meanwhile, efforts to lease heavy machinery are underway to increase the firm’s bankrupt assets and maintain its value.
Impact on Employees: Mass Layoffs at Sritex
The closure of Sritex’s factory left thousands of employees jobless. Mass layoffs significantly impacted workers in Sukoharjo, Central Java, where Sritex operated its largest production site. The Indonesian government stepped in to address labor concerns, ensuring temporary employment opportunities for affected workers.
Minister of Manpower Yassierli highlighted these efforts, stating, “The Ministry of Manpower also appreciates the various commitments and steps taken by the curator, as previously stated, that in the next two weeks, workers will be re-employed.” This initiative offers temporary relief, but many workers remain uncertain about long-term employment.
Labor unions have also voiced concerns, urging the government to provide a sustainable solution. The situation remains fluid as workers await decisions from potential investors.
Future of Sritex: New Investors and Possible Name Change
Sritex’s future depends on securing new investors. Nurma Sadikin revealed that interested investors are considering leasing the company’s machinery.
“For now, it’s only temporary for this investor (who is leasing Sritex’s heavy equipment) because we don’t know who the auction winner will be. Maybe it can continue later,” Nurma explained. This means the continuity of operations depends on the outcome of investor negotiations.
Despite investor interest, it remains unclear whether all laid-off employees will regain their jobs. Nurma emphasized, “We cannot be sure.” While temporary employment offers some hope, there is no certainty about permanent rehiring.
Looking Ahead: The Uncertain Future of Sritex
The Sritex factory closure marks a significant shift in Indonesia’s textile industry. Financial mismanagement, mounting debts, and legal battles led to the downfall of this once-thriving company. The mass layoffs created economic instability for thousands of workers, prompting government intervention.
With investors showing interest, the company may rebrand and resume operations. However, the extent of this revival remains uncertain. The coming months will determine whether Sritex can rebuild or fade into history.
Source: cnnindonesia.com, kompas.com
Image: Antara/Mohammad Ayudha
