"Indonesia’s textile leader Sritex to lay off thousands, faces challenges with creditors", 3 March 2025

PT Sri Rejeki Isman (Sritex), a major Indonesian textile manufacturer, is set to close its doors and lay off thousands of employees after creditors rejected a proposal to keep the company operational, according to a report. The decision, made during a court-supervised meeting in Semarang, Central Java, will result in the liquidation of the bankrupt company’s assets.

Sritex President Director Iwan Kurniawan Lukminto confirmed that the company will ensure all affected workers receive their due rights. Reports indicate that approximately 11,000 workers will lose their jobs as factories in Central Java are scheduled to cease operations on 1st March.

The closure of Sritex, a prominent garment producer supplying global brands like H&M, Uniqlo, and Zara, follows its declaration of bankruptcy by a Semarang commercial court in October, a decision upheld by the Supreme Court in December. The company’s financial distress, exacerbated by the pandemic’s impact on orders, resulted in approximately US $ 1.6 billion in liabilities as of September last year.

The company’s failure to secure a “going concern” agreement from creditors occurred despite attempts by President Prabowo Subianto to intervene, including efforts to maintain Sritex’s import-export operations. The company’s struggles are emblematic of the broader challenges facing Indonesia’s textile industry, which is grappling with a surge of cheaper clothing imports from China. The layoffs come at a particularly sensitive time, as Indonesia prepares for the Ramadan festive season.