Indonesia is preparing to create a state-owned textile group by absorbing a number of domestic producers, among them the bankrupt PT Sri Rejeki Isman Tbk, better known as Sritex.
The initiative forms part of a wider drive to consolidate the country’s textile and garment sector, with the aim of tightening supply chains and sharpening competitiveness against global rivals.
Industry Minister Muhammad Sarmuji described the planned entity as a vehicle for pooling the capabilities of several local manufacturers.
Every participating firm would be expected to contribute in line with its own strengths, producing a more joined-up industrial ecosystem.
“A number of textile companies will indeed be taken over. Yes, Sritex is included, along with several others,” Sarmuji informed.
Sarmuji said the proposal has already been raised with the Danantara Investment Management Agency (BPI).
The partnership is intended to merge the production capacity, technology and operational know-how of multiple mills, thereby bolstering the domestic industry.
The Sritex deal, however, remains subject to further talks. Officials have yet to disclose either a transaction value or the structure the takeover would follow.
Asset valuation, the firm’s financial position and liaison with the curator team are among the key matters that must be settled before any acquisition can proceed.
Earlier, Indonesia’s second sovereign wealth fund named Danantara’s chief executive Rosan Roeslani, had revealed plans for a new company to build on the existing textile base.
The vehicle is designed to drive integration across the textile value chain, including through machinery optimisation, wider use of technology and expanded production capacity.
Under the blueprint, the government is reported to be earmarking investment of about US $6 billion, or roughly Rp101 trillion, to reinforce the national industry.
Yet the breakdown of that allocation, the funding mechanism and the share set aside for acquisitions versus production-facility development all remain to be clarified.
Consolidation through a state textile enterprise is expected to yield stronger, leaner operators. Closer integration among players could also improve supply chains, lift productivity and enhance the sector’s ability to take on imported textile goods.
Even so, the scale of the proposed outlay demands rigorous commercial scrutiny. Authorities must be certain that target companies hold productive assets and credible growth prospects.
