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Sritex expected to export to five more countries this year
Publicly listed textile manufacturer Sri Rejeki Isman, known as Sritex, is to further expand its export market to at least five more countries in a bid to boost its total revenues by a minimum 10 percent this year
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ublicly listed textile manufacturer Sri Rejeki Isman, known as Sritex, is to further expand its export market to at least five more countries in a bid to boost its total revenues by a minimum 10 percent this year.
President director Iwan Setiawan Lukminto revealed on Monday that Kosovo was the company's newest overseas market, the country in the first quarter ordering military uniforms, which contributed 20 percent of Sritex's total sales last year.
'We've already exported to Kosovo. Next is Cambodia, which is expected to buy 100,000 military uniforms,' Iwan said, adding that the company was also in negotiations to export garments to Australia and several African countries.
Sritex, which is also engaged in midstream segments like spinning, weaving, finishing and garment production, currently exports 48 percent of its products to around 30 countries in Asia, including Papua New Guinea and Timor Leste, the Middle East, including the UAE and Qatar, Europe, including Germany, Sweden, Norway and the Netherlands, the US and Africa.
Following the expansion plan, the company targets a 7 to 10 percent increase in sales to between US$594 and $611 million and an 8 to 15 percent increase in net profits to between $49 million and $52 million this year.
Last year, Sritex booked $555 million in total sales, up 23 percent from a year earlier, with profits jumping 50 percent to $45 million.
'Garment-finishing products are the most lucrative segments in our production, so we will boost exports of uniforms and fashion garments,' Iwan said.
This year, Sritex has spent $104 million in capital expenditure (capex), partly on a factory in Sukoharjo, Central Java, to boost the production capacity of its finishing segment to 20 million yards per month, from a current 10 million yards per month. The rest of the capex will buy several new operational machines.
Sritex finance director Allan Moran Severino said that the country's economic slowdown had not greatly affected the company's performance, revealing that it had booked a 7 percent increase in sales to $166 million and a 12 percent increase in profits to $14.8 million during the January-March period.
'We use dollar-denominated transactions and 40 percent local raw materials,' Allan said.
In domestic sales, Allan added, the company only sold uniforms to institutional buyers such as the country's largest taxi operator Blue Bird Group, state-owned postal firm Pos Indonesia, cigarette producer Djarum and state institutions including the Indonesian Military (TNI) and National Police (Polri). 'The rupiah's depreciation mostly hit manufacturers selling to retailers,' he said.
Meanwhile, the company's overseas buyers include Japanese trading company Marubeni Corporations and Belgian textile trader Chemitex for spinning, as well as India's yarn and fibers manufacturer Filatex Co and Turkish garment producer Sunteks for weaving.
Customers in the finishing segment include Chinese textile company Shengrun Textile, while fashion customers include retailers like Swedish-based H&M, US-based Macy's and Japan-based Ito Yokado Fashion.
Sritex has allocated $86 million for next year's capex, expected to be sourced from internal cash, to enter the retail business, expanding to downstream textile operations by acquiring local or global brands.
'We prefer to buy existing brands. Starting our own brands would be more difficult as we would need designers, outlets. We'd rather buy brands that already have all that,' Allan said, adding that the plan was expected to launch next year, as the company was still searching for suitable brands.
Next year, Sritex is optimistic it will reach its targets of a 21 percent increase in sales and a 31 percent rise in profits, and claims to be the archipelago's biggest textiles player.
According to the company's data, Sritex is the top manufacturer company in Indonesia because it had the highest revenues during the first quarter this year, defeating its competitors PT Ever Shine Tex Tbk with $10.2 million in sales, PT UNITEX Tbk with $4.5 million, PT Apac Citra Cantertex Tbk with $42.3 million and PT Pan Brothers Tbk with $75.76 million.
In the global market, Sritex competes with India's Vardhman Textiles Ltd. and Arvind Limited, China's Shenzhou International Group and Texhong Textile Group Ltd. and Taiwan's Makalot Industrial Co. Ltd. (foy)
