Sritex and the Future of Indonesia's Textile Industry: Government Promises Protection for Workers and Production Stability

Jakarta, INTI - Indonesia’s textile industry is currently under close government scrutiny. On Tuesday, October 29, 2024, President Prabowo Subianto convened a limited meeting at the Merdeka Palace in Jakarta, attended by several related ministers, to discuss the ongoing issues plaguing the sector. A key item on the agenda was the sustainability of major textile company Sritex, which is currently facing financial distress and in the process of bankruptcy.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, affirmed the government’s commitment to supporting the textile industry so it can withstand global economic challenges. "The President is very concerned about the condition of our textile industry, especially Sritex. His directive is clear: for the company to keep operating and providing employment," Airlangga told the media.

Challenges in the Textile Industry and Government’s Actions

The domestic textile industry faces major hurdles, including fierce competition from imported products and rapid shifts in consumer demand. Data from Statistics Indonesia (BPS) shows that the textile industry has seen a 10% decrease in production since early 2022, driven by high production costs and competition from often cheaper imported products.

To address this, the government has planned several policies aimed at protecting the textile industry, including import tax reductions and enhancing local industry capacity through training programs and subsidies. “We will coordinate with the curators of Sritex to discuss appropriate rescue steps, in accordance with legal regulations,” Airlangga elaborated.

Ensuring Workers' Rights and Labor Welfare

Minister of Manpower, Yassierli, emphasized the importance of safeguarding workers’ rights during this uncertain time. He stated that the government is committed to preventing layoffs, which could have serious social consequences. “We have instructed the company to avoid layoffs, and all employees are urged to remain calm. The government will support them to find the best solution,” said Yassierli.

Additionally, the government is committed to ensuring that basic workers' rights, such as salary payments, benefits, and other entitlements, are met. Data from the Ministry of Manpower reveals that around 1.8 million workers depend on the textile industry, with approximately 200,000 employed by major companies like Sritex. Worker welfare is a priority, as the sector is one of the key labor-intensive industries contributing to Indonesia’s economy.

Policy Support and Hopes for Revitalizing the Textile Industry

The government’s protective measures for the textile industry extend beyond short-term solutions. In its long-term strategy, the government is committed to improving the competitiveness of Indonesian textile products in the international market. Among the initiatives is to expedite trade agreements with Asian and European countries.

The government is also pushing for technological modernization in the textile industry through incentives and easier access to funding for textile companies. According to the Ministry of Industry, the textile industry’s contribution to national exports reached 10% of total manufacturing exports in 2023, with products exported to more than 50 countries. This modernization is expected to increase the added value of Indonesian products in the global market.

Through the government’s multifaceted approach, it is hoped that the domestic textile industry can overcome existing challenges and continue to grow by capitalizing on available global market opportunities. The government is optimistic that through collaboration among companies, workers, and the private sector, Indonesia can build a stronger, more competitive, and sustainable textile industry.