The national textile industry is in serious trouble. The bankruptcy declaration of PT Sri Rejeki Isman Tbk or Sritex has sounded an alarm, requiring immediate government intervention to correctly diagnose and provide a panacea to revitalize the labor-intensive textile industry and domestic textile products. Sritex has long been a symbol of Indonesia's high-quality textile industry. The Executive Director of the Indonesian Textile Association (API) stated that if such a large factory can collapse, it means there are things that must be noted. It is necessary to examine what caused Sritex's downfall—whether it was internal management issues or external problems related to the business environment of the textile industry. However, beyond that, Sritex's collapse is also a serious message calling for the government's attention and support for the textile industry. The reason is that the textile industry is labor-intensive and can absorb a large number of workers, thus helping the government drive economic growth. The absorption of workers and the growth of manufacturing performance will stimulate economic growth. The textile industry faces pressures from various sides. Domestically, the industry finds it difficult to compete because the domestic market is flooded with cheap or competitively priced imported products. Some imported goods go through legal procedures, but there are also those that enter through illegal channels. After the issuance of Minister of Trade Regulation No. 8 of 2024, concerning the third amendment to Minister of Trade Regulation No. 36 of 2023 on Import Policies and Regulations, the influx of imported products into the Indonesian market has become more severe. This regulation eliminated the technical considerations (pertek) from the Ministry of Industry regarding imports, ultimately making it easier to import finished goods, while the textile industry finds it hard to sell its products. When export markets are sluggish, the domestic market of 280 million people should be reliable.
On the other hand, the export market is also sluggish due to the global economic slowdown. Meanwhile, the textile industry also faces rising production costs, such as increases in energy prices and labor wages. At a time when export markets are sluggish, the domestic market of 280 million people should be reliable. After all, TPT products meet the basic needs of society, which is their primary concern, so the domestic market should be protected. The General Chairman of the Indonesian Fiber and Filament Producers Association (APSyFI) stated that the decline of the TPT industry is due to a lack of synergy between inter-ministerial policies related to TPT. The government actually understands the problem, namely that the domestic market is flooded with imported goods. However, in reality, there are policies that make imports easier. They hope the new government can strengthen synergy among ministries and also step up the fight against illegal import smuggling. The textile industry is strategically very important for encouraging economic growth because of its labor-intensive nature, which can provide a large number of job opportunities for society. When asked by reporters after his inauguration in Jakarta, the Minister of Industry stated that the government will focus on creating as many job opportunities as possible. The government obtains spending allocations from the State Revenue and Expenditure Budget (APBN) to create jobs. Creating jobs is the responsibility of all government agencies, however, sectors such as manufacturing immediately feel the impact of job creation. The pressure faced by the textile industry is also influenced by regulatory products from other ministries. One example is the Minister of Trade Regulation No. 8 of 2024, which he believes is the trigger for the decline in manufacturing and textiles. This regulation took effect on May 17, 2024, causing a downturn in the textile industry. By early July 2024, at least 11,000 workers had been laid off.
Manufacturing also experienced contraction, as reflected in the Purchasing Managers' Index (PMI) released by S&P Global, which contracted for three consecutive months starting in July. The indices for July–September were 49.3, 48.9, and 49.2. The pressure faced by the textile industry is also influenced by regulatory products from other ministries. A reading below 50 indicates contraction, while above 50 indicates expansion. Before July, Indonesia's PMI had been in expansion for 34 consecutive months. The last time Indonesia was in contraction was in August 2021. To address this, he has proposed to the Prabowo government to amend Permendag 8/2024, in order to protect the domestic market from uncontrolled import attacks. It is hoped that domestic manufacturing, including textiles, can recover, expand, and provide more job opportunities for society. The Director of Assessment at the Indonesia Stock Exchange (IDX) stated that in response to the news of the bankruptcy decision for Sritex, whose stock code is SRIL, the exchange immediately responded to protect investors. He requested SRIL to provide the public with information regarding the follow-up actions and plans following the bankruptcy decision, including SRIL's efforts to maintain business continuity. In monitoring listed companies, IDX has also made several efforts to protect retail investors. One method is to impose special symbols and place the company under special supervision. This can be done if the issuer meets certain criteria stipulated in Exchange Regulation IX concerning the listing of equity securities under special supervision. It is hoped that this will provide investors with early awareness of potential problems with the listed company.
According to PT Sri Rejeki Isman Tbk's financial report for the second quarter of 2024, the company's total comprehensive loss for the year was US$25.73 million, equivalent to IDR 401.94 billion. This loss was about three times smaller than the same period in 2023, which was US$78.03 million, equivalent to IDR 1.21 trillion. The loss occurred because net sales revenue was lower than the cost of sales. In the second quarter of 2024, net sales reached US$131.72 million, equivalent to IDR 2.05 trillion. Meanwhile, the cost of sales reached US$150.24 million, equivalent to IDR 2.34 trillion, resulting in a total gross loss of US$18.51 million or IDR 289.15 billion. As much as 56.97% of Sritex's business comes from domestic sales, with the remainder from export sales at 43.02%. Among product types, yarn sales (both export and domestic) are the largest contributor, accounting for 51.79% of total sales. The remainder comes from sales of finished fabrics, garments, and greige fabrics. However, overall, net sales revenue in the second quarter of 2024 contracted by 26.70% compared to the same period in 2023. On the other hand, compared to the same period in 2023, Sritex's cost of sales actually decreased by 24.21%. The most significant decrease in cost of sales came from the procurement of raw materials, but it was still greater than the revenue generated. As of the time of this news, Sritex's board of directors had not responded to media calls or messages.
The national textile industry is in serious trouble. The bankruptcy declaration of PT Sri Rejeki Isman Tbk or Sritex has sounded an alarm, requiring immediate government intervention to correctly diagnose and provide a panacea to revitalize the labor-intensive textile industry and domestic textile products. Sritex has long been a symbol of Indonesia's high-quality textile industry. The Executive Director of the Indonesian Textile Association (API) stated that if such a large factory can collapse, it means there are things that must be noted. It is necessary to examine what caused Sritex's downfall—whether it was internal management issues or external problems related to the business environment of the textile industry. However, beyond that, Sritex's collapse is also a serious message calling for the government's attention and support for the textile industry. The reason is that the textile industry is labor-intensive and can absorb a large number of workers, thus helping the government drive economic growth. The absorption of workers and the growth of manufacturing performance will stimulate economic growth. The textile industry faces pressures from various sides. Domestically, the industry finds it difficult to compete because the domestic market is flooded with cheap or competitively priced imported products. Some imported goods go through legal procedures, but there are also those that enter through illegal channels. After the issuance of Minister of Trade Regulation No. 8 of 2024, concerning the third amendment to Minister of Trade Regulation No. 36 of 2023 on Import Policies and Regulations, the influx of imported products into the Indonesian market has become more severe. This regulation eliminated the technical considerations (pertek) from the Ministry of Industry regarding imports, ultimately making it easier to import finished goods, while the textile industry finds it hard to sell its products. When export markets are sluggish, the domestic market of 280 million people should be reliable.
On the other hand, the export market is also sluggish due to the global economic slowdown. Meanwhile, the textile industry also faces rising production costs, such as increases in energy prices and labor wages. At a time when export markets are sluggish, the domestic market of 280 million people should be reliable. After all, TPT products meet the basic needs of society, which is their primary concern, so the domestic market should be protected. The General Chairman of the Indonesian Fiber and Filament Producers Association (APSyFI) stated that the decline of the TPT industry is due to a lack of synergy between inter-ministerial policies related to TPT. The government actually understands the problem, namely that the domestic market is flooded with imported goods. However, in reality, there are policies that make imports easier. They hope the new government can strengthen synergy among ministries and also step up the fight against illegal import smuggling. The textile industry is strategically very important for encouraging economic growth because of its labor-intensive nature, which can provide a large number of job opportunities for society. When asked by reporters after his inauguration in Jakarta, the Minister of Industry stated that the government will focus on creating as many job opportunities as possible. The government obtains spending allocations from the State Revenue and Expenditure Budget (APBN) to create jobs. Creating jobs is the responsibility of all government agencies, however, sectors such as manufacturing immediately feel the impact of job creation. The pressure faced by the textile industry is also influenced by regulatory products from other ministries. One example is the Minister of Trade Regulation No. 8 of 2024, which he believes is the trigger for the decline in manufacturing and textiles. This regulation took effect on May 17, 2024, causing a downturn in the textile industry. By early July 2024, at least 11,000 workers had been laid off.
Manufacturing also experienced contraction, as reflected in the Purchasing Managers' Index (PMI) released by S&P Global, which contracted for three consecutive months starting in July. The indices for July–September were 49.3, 48.9, and 49.2. The pressure faced by the textile industry is also influenced by regulatory products from other ministries. A reading below 50 indicates contraction, while above 50 indicates expansion. Before July, Indonesia's PMI had been in expansion for 34 consecutive months. The last time Indonesia was in contraction was in August 2021. To address this, he has proposed to the Prabowo government to amend Permendag 8/2024, in order to protect the domestic market from uncontrolled import attacks. It is hoped that domestic manufacturing, including textiles, can recover, expand, and provide more job opportunities for society. The Director of Assessment at the Indonesia Stock Exchange (IDX) stated that in response to the news of the bankruptcy decision for Sritex, whose stock code is SRIL, the exchange immediately responded to protect investors. He requested SRIL to provide the public with information regarding the follow-up actions and plans following the bankruptcy decision, including SRIL's efforts to maintain business continuity. In monitoring listed companies, IDX has also made several efforts to protect retail investors. One method is to impose special symbols and place the company under special supervision. This can be done if the issuer meets certain criteria stipulated in Exchange Regulation IX concerning the listing of equity securities under special supervision. It is hoped that this will provide investors with early awareness of potential problems with the listed company.
According to PT Sri Rejeki Isman Tbk's financial report for the second quarter of 2024, the company's total comprehensive loss for the year was US$25.73 million, equivalent to IDR 401.94 billion. This loss was about three times smaller than the same period in 2023, which was US$78.03 million, equivalent to IDR 1.21 trillion. The loss occurred because net sales revenue was lower than the cost of sales. In the second quarter of 2024, net sales reached US$131.72 million, equivalent to IDR 2.05 trillion. Meanwhile, the cost of sales reached US$150.24 million, equivalent to IDR 2.34 trillion, resulting in a total gross loss of US$18.51 million or IDR 289.15 billion. As much as 56.97% of Sritex's business comes from domestic sales, with the remainder from export sales at 43.02%. Among product types, yarn sales (both export and domestic) are the largest contributor, accounting for 51.79% of total sales. The remainder comes from sales of finished fabrics, garments, and greige fabrics. However, overall, net sales revenue in the second quarter of 2024 contracted by 26.70% compared to the same period in 2023. On the other hand, compared to the same period in 2023, Sritex's cost of sales actually decreased by 24.21%. The most significant decrease in cost of sales came from the procurement of raw materials, but it was still greater than the revenue generated. As of the time of this news, Sritex's board of directors had not responded to media calls or messages.