Sritex and the Textile Industry Shock: Between Challenges and Hopes

On March 1, 2025, PT Sri Rejeki Isman Tbk (Sritex) officially ceased operations after more than five decades as a textile industry giant in Southeast Asia. This decision represents a severe blow, not only to the 10,965 employees who were laid off but also to the entire national textile industry ecosystem.

How did a company that once recorded a profit of IDR 1.22 trillion before the pandemic end up accumulating IDR 25 trillion in debt and ultimately being declared bankrupt?

Examining the Root Causes

Sritex was more than just a textile company; it was a symbol of Indonesia's manufacturing prowess. Starting as a small kiosk in Pasar Klewer, Solo, Sritex grew into the largest integrated textile company in Southeast Asia. However, global industrial dynamics, economic instability, and post-pandemic supply chain disruptions severely undermined the company's financial foundations.

In addition to these challenges, external factors such as global trade policies, rising production costs, and increasing competition from countries like China and Vietnam further exacerbated Sritex's financial burden. Moreover, internal challenges, including corporate governance issues and less adaptive business strategies, accelerated the company's downfall.

The Domino Effect of Mass Layoffs

Sritex’s closure is not an isolated event. Over the past two years, Indonesia’s manufacturing sector has faced an alarming wave of layoffs. The Confederation of Indonesian Trade Unions (KSPI) reported that thousands of workers across various sectors lost their jobs, including those at Yamaha Music Indonesia, PT Tokay Bekasi, and PT Sanken. The Ministry of Manpower recorded that throughout 2024, approximately 80,000 workers were laid off, up from 60,000 in 2023.

The impact of these mass layoffs extends beyond individuals losing their livelihoods; it also significantly affects regional and national economies. Household consumption, a key pillar of Indonesia’s economic growth, is at risk of substantial decline.

Between Government Promises and Policy Realities

The government has announced various mitigation measures, including 10,000 new job opportunities for former Sritex employees, the Job Loss Insurance (JKP) program, and entrepreneurship and vocational training initiatives. However, the critical question remains: How effective will these policies be?

Do these programs genuinely address the needs of displaced workers, or are they merely temporary solutions without a long-term strategic direction?

The Future of Indonesia’s Textile Industry

The Sritex case should serve as a point of reflection for both industry players and policymakers. Indonesia’s textile industry must adopt new strategies to remain competitive, including technological modernization, production efficiency, and market diversification.

Moving forward, the government and industry stakeholders must collaborate to develop policies that support national manufacturing, including stronger worker protections and more competitive trade regulations.

Sritex’s closure serves as a stark reminder that even industry giants can collapse without innovation and adaptive policies. However, every crisis presents an opportunity—to rebuild and foster a more resilient and globally competitive industry.