Maintaining Quality and Brand

KOMPAS/TOTOK WIJAYANTO

Sritex President Director Iwan Setiawan Lukminto

Quality and brand. These two things are the key to successfully passing the storm in the market of textile and textile products. With these two things, publicly listed textile producer PT Sri Rejeki Isman Tbk can reach a wider market abroad and become a company that is trusted by consumers.

It is often heard that the textile and textile product industry is the industry that is just waiting for time to sink it. For one thing, because products from China hit the market so hard, that industrial players who were unable to compete were eliminated.

However, PT Sri Rejeki Isman Tbk (Sritex) strongly rejects this assumption. The company, listed as one of the companies in the Kompas100 index, believes that the future of the textile and textile product industry is still bright. In fact, this industry plays an important role to accelerate the growth of the national economy.

The president director of Sritex, Iwan Setiawan Lukminto, emphasized that one of the keys to excel in the textile and textile product (TPT) market was to maintain quality and brand. Below are excerpts from an interview with Kompas and Iwan at the Menara Kompas building, Jakarta, on Tuesday (6/8/2019).

How is the progress of Sritex since its establishment?

Initially, Sritex emerged from a kiosk built by my father, Lukminto, in 1966 in the Klewer market, Solo. Pak Lukminto initially bought fabrics from Bandung and sold them in Solo. Then, he thought, because he was tired of going back and forth between Bandung and Solo, he finally made his own fabric in Solo in 1968. It was only in 1970 that he entered the industry. Starting from fabric dyeing, he began to have consumers at the domestic level. Subsequently, the business expanded into Sukoharjo (near Solo) in 1978. Later, eventually, it became an integrated textile company, including fabric manufacturing in 1990.

In 1995 we began supplying military uniforms. Once at the national level, then to NATO. With that way, we can diversify our products. However, in 1998 there was a monetary crisis, which caused financial chaos in Indonesia. However, we managed to maintain buyer confidence because we did not leave Indonesia. In 2006, there was new hope when foreign investors returned. In the midst of this positive condition, we decided to enter the Indonesia Stock Exchange in 2013, listed as SRIL.

We became a public company because we wanted to be more professional in managing the company. We can raise funds from the public, because we can no longer obtain loans from banks due to lending limit regulations.

At present, various breakthroughs have been made by the company, resulting in an increase in the total assets of Sritex group by 45 times from that in the 2000s. The number of employees has reached 50,000 people

Sritex has always believed that the textile and textile product industry is not a sinking industry. Why?

We have often heard the bad talk about this industry. During 1998-2006 period, the industry was also said to have become a sunset industry. At that time, large textile companies collapsed because they entered into vehicle production. Finally, the textile industry was affected.

This time too. The same thing happened to the “shop next door". Actually, there is no problem with the textile industry. However, [a problem occurred] when trying to enter another business. This is the importance of being able to manage the company well.

KOMPAS/ERWIN EDHI PRASETYA

Production activities of the garment division of PT Sri Rejeki Isman Tbk or Sritex in Sukoharjo, Central Java, Wednesday (13/02/2019). The textile industry still has many opportunities in the domestic and export markets but faces challenges in efficiency and global competition.

Why did the factory move from West Java to Central Java? To reduce production costs?

Well, we talk business first. It is common in business that some companies will decline and some others grow. That\'s business. Like in property, cell phones to electronic equipment. We see Japan, whose products have been defeated by South Korea. Mobile phone products are also controlled by South Korea. However, is the Japanese technology industry considered an industry that will collapse? Of course, it is not.

What is the future of the textile industry in Indonesia?

Now business is a matter of brand and who is the producer. I believe in this business, clothing, food and shelter are often mentioned as the people’s basic needs and clothing is listed as the first. It could mean that clothing is the main basic need. However, what next for Indonesia? What we have to protect is the textile business in Indonesia. Why it should be protected? There is a reason. In any country, the fastest way to accelerate the economic growth is through the textile industry, such as in China. This is possible because workers can directly enter the textile industry.

For that, we must be able to make our country able to compete. Compared to neighboring countries, we are definitely less competitive in attracting [foreign] investors. In other countries, investors can easily get land and obtain a permit. Here, investors need to obtain so many permits.

We need regulations to protect and accelerate the textile industry and textile products in Indonesia. We must protect it. For example, imports of textile products that have already been produced in Indonesia should be prohibited until the local industry can grow. For example, the import restriction can be imposed for up to 10 years. If not, it will be difficult to develop the local textile industry.

Such restrictions can be stipulated in the Law on Clothing Sovereignty. We proposed that law. Many aspects must be regulated, such as imported goods, energy and human resources.

If it can be harmonized, we can appoint big companies to empower new small and medium businesses (SMEs). Like Toyota, many of its parts are made by SMEs. I hope for the same for the textile industry.

This company has entered the second generation, how should it adapt to the changes in the Industrial 4.0 era?

This 4.0 era certainly must be followed because all industries must be affected. For example, before we used paper, now we use electronic means. However, in the end, when it comes to products, we still talk about quality, which continues to be improved.

In the textile industry, currently, there is a growing trend in the use of robotics that can replace workers. My plan, a robot can be used in a developed country, for example, by opening a factory in Germany. There, labor costs are so high, so a robot is needed. The raw material is still from us. Currently we are still researching and Industry 4.0 must continue to be developed.

How can we apply Industry 4.0 in the company, for example the problem of human resources?

Now the ones who are working on our designs are young people. In our company, more than 60 percent of employees are millennials. Therefore, we have made textile companies - which were usually used to be messy and dirty - to be more comfortable and preferred by young people. Now many employees use computers and touch screens, which are more technological.

KOMPAS/ERWIN EDHI PRASETYA

Production activities of the garment division of PT Sri Rejeki Isman Tbk or Sritex in Sukoharjo, Central Java, Wednesday (13/02/2019). The textile industry still has many opportunities in the domestic and export markets but faces challenges in efficiency and global competition.

Finding human resources is difficult and easy. If it is suitable, they don’t want to move. Therefore, the environment should be good so that young people will come. If the factory is dirty and ugly, young people don\'t want to come.

Trade wars have generally affected industrial exports, but how could Sritexs exports to the US increase by threefold on an annual basis in the first half of 2019?

So, even if there is a trade war, we can still perform positively because the United States and Indonesia have a good relationship. We can use the good relations for the stability of all. Opportunities still exist despite the US-China trade war.

Indeed, currently the textile products are mainly exported to the US mainly because the country is the engine of the global economy. As a result of the trade war, they have to find new suppliers [other than China]. Well, that is our opportunity.