Indonesia’s Sritex Posts 35% Growth in Profit

By Vanesha Manuturi on 08:57 pm Apr 02, 2014

Jakarta. Sri Rejeki Isman, one of the nation’s leading garment manufacturers, posted strong profit growth last year on rising sales.

The Solo-based company said in a filing to the Indonesia Stock Exchange (IDX) on Wednesday that net income had risen by 35 percent to Rp 309.6 billion ($27 million) from the year before.

Total sales grew 24.3 percent to Rp 5.72 trillion last year.

The company, commonly known as Sritex, suffered from a widening foreign exchange loss due to a sharp depreciation of the rupiah against the dollar. Its foreign exchange loss widened to Rp 121.7 billion last year, compared with Rp 19.4 billion a year earlier.

Strong demand has helped Sritex record rising sales in the domestic market. Its domestic sales surged 121 percent to Rp 1.62 trillion last year compared with the year before.

Global sales also skyrocketed as orders from other Asian and European countries grew 23 percent and 46 percent respectively.

Sales to the United States and countries in South America rose 4.32 percent last year, while sales to African countries grew by 88 percent. On the other hand, sales to the United Arab Emirates were halved last year.

Sritex manufactures and distributes garments to more than 30 countries around the world. The textile company has attracted big-name retailers including Zara, Uniqlo, H&M, Gymboree, and WalMart.

Sritex was established in 1996 by H.M. Lukminto and Iwan Lukminto as a traditional trading company in Solo, Central Java. The company now owns a 50-hectare garment plant comprising nine spinning plants, three weaving plants, three dyeing/printing plants, and seven garment plants in the city.

The rupiah, which was traded at 11,303 against the US dollar on Wednesday, depreciated by 26 percent against the greenback last year, making it the worst performing currency in the Asia-Pacific region.

Sritex, which made its trading debut last year, raised Rp 2.2 trillion from its initial public offering last June.

Shares of the company fell 2.71 percent to Rp 215 on the IDX on Wednesday, in line with a slight decline of the main stock gauge.

Sritex’s main competitor, Pan Brothers, also reported a 41 percent increase in net income to $10.6 million last year from the year before.

Its sales climbed 19 percent to $340 million.

Pan Brothers currently has 10 plants in various locations on Java island.