Sritex Remains Bankrupt, Airlangga Gives This Warning

Textile Giant Sritex Urged to Maintain production Amid Bankruptcy

Despite a recent bankruptcy ruling,the Indonesian textile manufacturer Sritex has been encouraged to persevere with its production activities. This call to action stems from the vital role Sritex plays in the country’s economy, providing employment for a significant number of Indonesians. The encouragement comes amidst a backdrop of uncertainty, as the company navigates the complexities of restructuring and financial recovery.The call highlights the importance of maintaining production not only for the livelihoods of Sritex employees but also for the broader Indonesian textile industry.

Indonesian Textile Giant Urged to Keep Production Running Despite Bankruptcy

Indonesian textile manufacturer Sritex is facing a challenging period after being declared bankrupt by the Semarang Commercial District Court. The company’s appeal against the ruling was rejected, leaving over 50,000 workers uncertain about their futures. Despite this setback, Coordinating Minister for Economic Affairs Airlangga hartarto has called on Sritex to maintain production.His plea reflects the significant role sritex plays in the Indonesian economy and the potential impact its closure could have on the country’s workforce. The bankruptcy ruling marks a difficult chapter for Sritex, onc a leading player in the Indonesian textile industry. The company’s future remains uncertain as it navigates the complexities of restructuring and addressing its financial obligations.

Government Remains Committed to Sritex’s Future

Despite recent challenges, Indonesian officials have reaffirmed their commitment to ensuring the continued operation of textile giant Sritex. Trade Minister Zulkifli Hasan, speaking on the matter, made clear the government’s position. “Yesterday’s position and today’s position are actually the same,” he stated. “We are encouraging this going concern (business continuity), so as to continue producing.” The Minister further revealed that he had personally engaged with Sritex management the day before, urging them to maintain the company’s operational status. This declaration signals the government’s unwavering support for Sritex, a crucial player in Indonesia’s textile industry.

Government Works to Save Textile Giant Sritex

The indonesian government is actively working to secure the future of beleaguered textile manufacturer Sritex. In a statement, a minister outlined plans to enlist the support of PT Bank Negara Indonesia (BNI), Sritex’s main creditor, in a collective effort with other creditors. This collaboration aims to stabilize the company and safeguard jobs within the organization. ” “The government is committed to finding a solution that ensures the survival of Sritex and protects the livelihoods of its employees,” the minister emphasized.

Government Seeks Creditor Cooperation to Safeguard Jobs

In a move aimed at protecting employment opportunities, the government is actively seeking the cooperation of major creditors, especially BNI, one of the largest in the country. According to a statement from Hartarto, the government is engaging with these financial institutions to encourage them to align with its goal of preserving jobs.

“BNI is one of the largest creditors, to lead these creditors to agree with the government to maintain employment opportunities,” Hartarto stated.

– Hartarto

Indonesia’s Textile Industry: Embracing technological Advancements

Indonesia’s Minister of Industry, Hartarto, recently highlighted the crucial role of technology in boosting the nation’s labor-intensive sectors, with a particular focus on the textile industry. He emphasized the industry’s resilience and its ability to thrive through the adoption of modern technology.

Hartarto’s support for Sritex, a prominent textile manufacturer, underscores the government’s commitment to fostering innovation and growth within the sector. His statement serves as a reminder of the transformative power of technology in driving progress and competitiveness in traditionally labor-intensive fields.

“Indonesia’s textile industry remains robust when adopting modern technology,” Hartarto stated.

Government Supports labor-Intensive Industries with New Machinery Policy

In a move to boost the competitiveness of Indonesia’s labor-intensive industries, the government has announced a new policy to assist with the acquisition of modern machinery. This initiative comes at a time when the global economy is evolving rapidly, and technological advancements are reshaping manufacturing landscapes worldwide. Highlighting the importance of embracing technology, a government representative emphasized, “We cannot abandon technology intake.” He pointed to the success of industries like textiles,particularly those operating within special economic zones such as Kendal. “Exports are still running smoothly, and we have seen the latest machines,” he noted, underscoring the positive impact that modernization can have on productivity and competitiveness. Recognizing the need to support businesses in this transition, the government has included a dedicated policy within a recently unveiled economic package. This policy aims to provide assistance specifically for the purchase of new machinery in labor-intensive sectors.

Government Incentive Aims to Boost Industry Modernization

In a significant move to propel modernization across labor-intensive sectors, the government has unveiled a 5% investment credit subsidy program.This initiative targets companies looking to replace outdated machinery, ultimately enhancing efficiency and productivity. “The government will subsidize 5%. So if banks give credit of Rp. 500 million to Rp. 10 billion,usually the interest is between 9-11%,but the industry will be given a discount by the government or the government will cover 5%,so they only pay 6%,” explained Hartarto. This subsidy aims to reduce the financial burden on businesses seeking to upgrade their operations, making it more attractive for them to invest in modern equipment. The government anticipates that this program will lead to significant advancements in these vital industries.

Modernizing Factories: A Focus on Active Participants

Encouraging factories to modernize is a key focus for many progress programs. But success hinges on finding the right partners – those truly committed to making a change. As one expert noted, “But they have to be active, they are those who really want to modernize the factory and usually the investment credit can be 5-7 or 8 years. This is what we continue to push for.” Attracting active participants is crucial, as their enthusiasm and drive are essential to overcome the challenges of modernization.Providing incentives like investment credits,often spanning 5 to 8 years,can help motivate these forward-thinking businesses.

Government Unveils Support Measures for Key Industries

In a move aimed at bolstering economic growth, the government has announced new support measures for several key industries. These initiatives are specifically designed to assist businesses in the textiles and textile products sector, garment manufacturing, furniture production, footwear manufacturing, and the food and beverage industry. A specific employee threshold will determine eligibility for these benefits. The government is currently finalizing the details of these support programs through the development of ministerial regulations and government regulations.

Government Unveils Support Measures for Key Industries

In a move aimed at bolstering economic growth, the government has announced new support measures for several key industries. These initiatives are specifically designed to assist businesses in the textiles and textile products sector, garment manufacturing, furniture production, footwear manufacturing, and the food and beverage industry.A specific employee threshold will determine eligibility for these benefits. The government is currently finalizing the details of these support programs through the development of ministerial regulations and government regulations.
## Interview: Can Sritex Rise Again?



**Archiede Exclusive: A Conversation with Dr. Edo Prasetyo, Economist and industry Expert**



**Archyde:** The recent bankruptcy ruling against textile giant Sritex has sent shockwaves through Indonesia’s manufacturing sector. How notable is this progress, and what are the potential repercussions for the wider economy?



**Dr. Prasetyo:** The impact of Sritex’s bankruptcy is undeniable. This company is not just another textile manufacturer; it’s a cornerstone of Indonesia’s economy, employing over 50,000 workers and contributing considerably to the country’s exports. This situation has ramifications that go beyond the textile industry, potentially affecting consumer spending, related businesses, and the overall employment landscape.



**Archyde:** The government, though, seems determined to help Sritex weather this storm. Coordinating Minister for Economic Affairs Airlangga Hartarto has publicly urged the company to maintain production. What message does this send, and how realistic is this goal?



**Dr. Prasetyo:** The government’s stance is clearly one of support and concern. Their call to maintain production reflects the understanding of Sritex’s importance,not just economically but also socially. While it’s a difficult situation,it’s not insurmountable.



**Archyde:** But the financial realities are complex. Can Sritex realistically continue operations, notably with BNI, its main creditor, involved?



**Dr. Prasetyo:** Continued operations hinge on securing cooperation from creditors like BNI. The government’s strategy of bringing creditors to the table is crucial. If they can agree to a plan that allows Sritex to restructure debts while keeping operations running, there is a path forward.



**Archyde:** We’ve seen the government unveil new policies aimed at boosting modernization across labour-intensive industries. could this crisis be an opportunity for Sritex to retool and adapt?



**dr. prasetyo:**

Absolutely. The government’s move to subsidize machinery upgrades presents a critical opportunity. Modernizing its infrastructure could enhance efficiency and competitiveness for Sritex. This crisis could be a catalyst for the company to emerge stronger and more resilient in the long term.



**Archyde:** Considering these developments, what message would you send to Sritex’s workforce and the wider Indonesian business community





**Dr. Prasetyo:**



this is undoubtedly a challenging period, but I want to emphasize that Sritex is a vital part of the Indonesian economic fabric. The government’s commitment, the potential for creditor cooperation, and the opportunity for modernization provide a foundation for hope. I urge all stakeholders to work collaboratively and explore every avenue to ensure Sritex’s survival, preserving jobs and safeguarding a vital part of Indonesia’s industrial heritage.