Thu, 02 Oct 2003

Texmaco hit by protests over layoffs, suspensions

The Jakarta Post, Jakarta/Semarang

Thousands of workers of PT Texmaco Group, the country's biggest textile manufacturer, held separate demonstrations in three cities on Wednesday, demanding that the government save the giant company from imminent bankruptcy.

The workers also complained about being laid off in January this year, and urged the government to help solve their problems.

In Jakarta, more than 1,000 Texmaco workers flocked to the Indonesian Bank Restructuring Agency (IBRA) building, demanding it help lift their company out of financial trouble.

Texmaco owes a total of US$3.4 billion to IBRA, according to Bloomberg news agency. It also owes at least US$1 billion to foreign bondholders, a debt that has not been restructured, including about $700 million owed by its main textile unit, PT Polysindo Eka Perkasa.

The ongoing financial trouble has forced the company to suspend and lay off thousands of its workers.

In a hearing with the House of Representatives last June, Texmaco Group's owner Marimutu Sinivasan said that his company needed at least US$25 million in fresh working capital to survive its financial troubles.

However, the central government and IBRA were reluctant to inject any new funds into Texmaco, putting the giant company under disarray.

Texmaco's financial turmoil was partly blamed in the death of Sinivasan's brother, Marimutu Manimaren, who committed suicide on Aug. 5 in Jakarta.

In the East Java town of Malang, more than 2,000 workers of PT Wastra Indah Batu, a subsidiary of PT Texmaco Group, held a similar rally in front of the mayoralty administration office.

They called on the government to inject fresh funds in order for their company to avert bankruptcy, Antara reported.

"We want the government to solve PT Texmaco's problems immediately, so that there would not be more massive layoffs in the company," said a protester in Malang.

PT Wastra Indah recently suspended the contracts of at least 1,000 out of its 2,340 workers in Malang due to the financial problems with its holding company, Texmaco Group, leaving their fate uncertain.

However, the suspended workers are still paid 75 percent of their monthly basic salaries.

Also on Wednesday, more than 3,000 other workers with Texmaco rallied at the Central Java capital of Semarang in a protest against being laid off by the company.

Grouped in the Communication Forum for the Rescue of Texmaco Workers (FKPKT), they conveyed their grievances at the provincial legislative council.

It was the second time the group staged a protest in Semarang in the past week.

The forum said PT Texmaco had suspended 2,550 workers and laid off 1,540 others in Central Java during the January to September period.

From 1998 to 2003, the company suspended about 11,000 out of its 24,000 workers in total.