PT Sri Rejeki Isman (Sritex), one of Indonesia’s leading textile manufacturers, is set to close its operations and lay off approximately 11,000 employees after creditors rejected a proposal to keep the company running. The decision was made during a court-supervised meeting in Semarang, Central Java, marking the liquidation of the bankrupt company’s assets.
Sritex President Director Iwan Kurniawan Lukminto confirmed that the company would ensure affected workers receive their due rights. The closure, which affects factories in Central Java, is set to take place on March 1st.
The company, which produced garments for global brands such as H&M, Uniqlo, and Zara, filed for bankruptcy in October, a decision upheld by Indonesia’s Supreme Court in December. Sritex’s financial difficulties, worsened by the pandemic’s impact on demand, led to liabilities totaling around $1.6 billion as of September last year.
Despite intervention efforts by Indonesian President Prabowo Subianto to sustain Sritex’s import-export operations, the company failed to secure a “going concern” agreement with creditors. The closure highlights broader challenges within Indonesia’s textile industry, especially with the growing influx of cheaper imports from China. The layoffs come at a particularly challenging time, as the country approaches the Ramadan festive season.
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