JAKARTA: South Korean-owned garment maker PT Samwon Busana Indonesia will permanently shut its factory in Jepara, Central Java, on Aug 1, affecting around 680 workers, as it has been grappling with losses since the coronavirus pandemic.
The company is expected to continue operating another business unit in Semarang, Central Java.
“We would like to clarify that PT Samwon Busana Indonesia is not leaving Indonesia or shutting down entirely, but is restructuring operations at its Jepara unit,” Industry Ministry spokesman Febri Hendri Antoni Arif said in a statement on Tuesday.
The ministry said it would summon the company’s management to clarify the reasons behind the Jepara unit’s losses, the fulfillment of workers’ rights and plans to transfer orders and machinery to the Semarang facility.
The ministry will coordinate with the Manpower Ministry to oversee the resolution of industrial relations issues and ensure severance payments and other worker entitlements are handled fairly and transparently in line with Indonesian law, he said.
At the same time, it will also work with the Industry Ministry’s Industrial Human Resources Agency, the Indonesian Textile Association, the Indonesian Employers Association and other garment companies in Central Java to identify opportunities for laid-off workers.
The government also plans to approach the company’s headquarters in South Korea to maintain its long-term investment commitment in Indonesia and engage with major American buyers to encourage them to keep garment orders in Indonesia rather than shift them to competing countries.
“We are taking steps to protect the affected workers while maintaining the investment climate and the sustainability of Indonesia’s garment industry,” Febri said.
The ministry’s intervention comes as the garment industry faces pressure from weak demand, rising production costs and intensifying competition.
Samwon Busana Indonesia, which began operations in Indonesia in 2015, had a workforce of around 2,200 before the Covid-19 pandemic. — The Jakarta Post/ANN
