Sritex Officially Shuts Down After Financial Collapse

PT Sri Rejeki Isman Tbk (Sritex), once Southeast Asia’s largest textile company, has officially **ceased operations after being declared bankrupt by the Semarang Commercial Court. Unable to settle its Rp29.8 trillion debt, the company faced financial turmoil** it could no longer overcome.

From Industry Giant to Bankruptcy

Founded in 1966, Sritex rose to prominence, supplying military uniforms for NATO and the German Army in 1994 and exporting premium-quality textiles worldwide. It even survived the 1998 financial crisis, growing eightfold during that period.

However, financial troubles began in 2021 when Sritex defaulted on a US$350 million syndicated loan, triggering a debt restructuring process. By 2025, mounting liabilities and failed debt settlements sealed the company’s fate.

Legal Proceedings and Bankruptcy Ruling

Major creditors, including CV Prima Karya, Bank QNB Indonesia, PT Swadaya Graha, PT Rayon Utama Makmur, and PT Indo Bahari Ekspress, filed for debt suspension (PKPU) in 2021, citing unpaid obligations.

After failing to meet settlement agreements, the court officially declared Sritex bankrupt on January 25, 2025. Efforts to appeal the ruling and seek Supreme Court intervention were unsuccessful, making the closure final and irreversible.

Mass Layoffs: Over 10,000 Workers Affected

The shutdown has led to a massive wave of layoffs, impacting 10,665 employees:

• February 26, 2025: 9,604 workers were terminated.
• March 1, 2025: Total layoffs reached 10,665.

The company’s remaining assets are now under court-appointed receivership, which will oversee the distribution of employee benefits and severance pay.

“All employee rights will be processed according to legal procedures,” said Sumarno, Head of Sukoharjo’s Manpower and Industry Office.

Workers’ Rights and Uncertain Future

Despite job losses, Sritex employees are entitled to:

• Old Age Security (JHT)
• Unemployment Benefits (JKP)
• Severance Pay

However, many workers remain uncertain about their future. Widada, Head of the Sritex Workers Union, urged the company to ensure timely salary payments for February.

“Employees rely on this income for daily needs and loan payments. Delays would be devastating,” he emphasized.

A Cautionary Tale for Indonesia’s Textile Industry

Sritex’s downfall marks the end of an era, highlighting the risks of poor financial management in an unpredictable economy. The closure of Southeast Asia’s leading textile manufacturer serves as a wake-up call for Indonesia’s industry — sustainability requires more than just market dominance.

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