PT Sri Rejeki Isman (Sritex) was one of Southeast Asia's largest integrated textile manufacturers, operating four factories in Central Java that spanned the full textile production chain. The company was founded in the 1960s by the Lukman family and grew into a major employer in the region.
Financial distress began in 2022 as the company took on mounting debt while facing increasing competition from Chinese textile imports. Trade Ministerial Regulation No. 8/2024 loosened import restrictions, causing a surge of low-cost Chinese textiles into the Indonesian market. Chinese producers, benefiting from government subsidies and tax exemptions, had grown their share of global textile exports from 30.4% in 2010 to 42% in 2023.
In October 2024, raw material supplier Indo Bharat Rayon filed a lawsuit that led the Semarang Commercial Court to declare Sritex bankrupt. The company owed Rp 26.2 trillion ($1.6 billion) against total assets of only Rp 10 trillion — a shortfall of Rp 16.2 trillion. Between January and February 2025, 10,965 workers were laid off. Operations ceased entirely on March 1, 2025.
President Prabowo convened a high-level meeting to address the crisis. The government attempted to lease Sritex's machinery to attract investors and facilitate worker re-employment, but the company's financial hole was too deep for a quick rescue.
Owed Rp 26.2T against assets of Rp 10T, a 2.6x shortfall, so a single supplier lawsuit triggered bankruptcy and total shutdown.
Sritex accumulated Rp 26.2T in debt without a matching asset base — it owed more than 2.6 times what it owned.
A single lawsuit from a raw material supplier triggered bankruptcy, showing how little buffer the company had left.
The loosening of textile import restrictions in 2024 flooded Indonesia with subsidised Chinese products, undercutting Sritex on price across its entire product line.
The company had been in financial distress since 2022 but did not restructure or downsize while it still had time — it waited until the lawsuit forced the decision.
When a tariff wall comes down, a company whose costs assume protection collapses fast. Debt that was manageable under protection becomes crushing overnight.
FOLLOW THE EVIDENCE