Indonesian Sritex to acquire German uniform producer
Sri Rejeki Isman better known as Sritex, one of Indonesia’s vertically integrated leading textile and garment manufacturers, plans to acquire a German military uniform manufacturer. The aim of this acquisition is to enhance Sritex’ business in the European Union.
Iwan Kurniawan Lukminto, Vice President Director of Sritex, said that the acquisition of the German company should be completed in 2017. The German uniform manufacturer will be the “extended arm” of Sritex in Europe. Currently, about 15 % of Sritex’ total export revenue is generated from shipments to Europe.
Exports of Sri Rejeki Isman (Sritex) to Europe are still not too significant relative to the company’s total exports. However, the company’s philosophy is to diversify its business, and not to become dependent on one particular export destination.
Exports are becoming an increasingly important source of earnings for Sritex. In 2014 a total of 39 % of the company’s sales consisted of exports (worldwide), in 2015 this figure had risen to 48 %, implying nearly half of the company’s earnings are generated through exports. Lukminto added that Sritex exports good-quality cotton to China.
In 2015 Sritex’ revenue rose 12 % (y/y) to USD 622 million, while its net profit climbed 10.3 % (y/y) to USD 55.7 million. Sritex, which labels itself as Southeast Asia’s largest integrated textile manufacturer, has four production units: spinning, weaving, dyeing, and garment. Spinning contributes 39.3 % to the company’s total earnings, followed by dyeing (27.3 %), garment (21.8 %), and weaving (11.6 %).
The textile industry in Indonesia has good future prospects. Lukminto expects Indonesia’s textile industry to gain market share on the international market. Whereas China controlled 38 % of the global textile market in 2012 (and Indonesia only 3 %), China’s market share has been on the decline ever since. If Indonesia manages to add just two percentage points, then it would already exceed Indonesia’s current installed textile production capacity.
Sritex’s manufacturing plants are located in Sukoharjo and Semarang Indonesia. Its products include yarn, comprising rayon, cotton and polyester yarn; greige; finished fabric and garments.