Jakarta. The Supreme Court has rejected an appeal by textile giant Sri Rejeki Isman, popularly known as Sritex, to overturn a bankruptcy ruling issued by the Semarang District Court two months ago.

Sritex CEO Iwan Kurniawan Lukminto announced on Friday that the company would request a judicial review --the final legal recourse available in Indonesia -- to contest the ruling.

“We consider this measure essential to retain our business and protect the 50,000 workers who have been with us for decades,” Iwan said in a statement following the Supreme Court’s decision.

The Semarang District Court declared Sritex bankrupt on October 21 after a lawsuit was filed by creditor Indo Bharat Rayon over unpaid debts. The creditor successfully annulled a prior debt restructuring agreement with Sritex, prompting the company to pursue legal appeals.

Founded 58 years ago, Sritex is one of Indonesia’s oldest and largest textile companies, with production facilities spread across several cities and regencies in Central Java. The company is renowned not only domestically but also internationally, having supplied camouflage military uniforms to NATO countries -- a testament to its global reach and reputation.

The bankruptcy of Sritex raises significant concerns, given its pivotal role in Indonesia’s textile industry and its large workforce. Recognizing the potential socio-economic fallout, the government has intervened by forming an inter-ministerial team to address the issue and mitigate the risk of mass layoffs.

“We are committed to maintaining operations and avoiding mass layoffs during this challenging period,” Iwan said, emphasizing the company’s dedication to its workforce. “Our workers are the primary asset of the company, and we remain committed to contributing to the national textile industry.”

Sritex’s bankruptcy comes at a time when Indonesia’s textile and garment industry is grappling with various challenges, including declining export demand, rising operational costs, and increased competition from regional players like Vietnam and Bangladesh. Despite these challenges, the sector remains one of Indonesia’s largest non-oil-and-gas contributors to GDP, employing millions of workers nationwide.