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Duniatex Still Maintains 45,000 Employees PDF Print E-mail
Written by Maizer   
Wednesday, 30 October 2019

Duniatex Group, the largest textile company in Indonesia, chose to maintain the fate of its 45,000 employees amid the financial problems faced by one of its subsidiaries.


Duniatex Group's Public Relations Manager, Donalia S. Erlina ensured that the Duniatex Group was still operating as usual, despite financial problems.


"We want to straighten out the news related to financial problems faced by Duniatex that until now the company and production are still running as usual without experiencing disruptions," said Donalia.


Donalia who was also accompanied by Fransiscus Alip, a financial consultant from AJ Capital Advisory, explained that at this time the company continued to work on improving the company's finances in order to get the best settlement solution.


On that occasion, Alip revealed the financial problems faced by the Duniatex Group were due to late payment of interest and principal debt of subsidiary PT Delta Dunia Clothing and Textile (DDST) of US $ 13.4 million originating from a syndicate of banks led by HSBC and BNP Paribas.


"We want to straighten out the news in one of the media stating that the financial difficulties are due to the payment of maturing bonds. Whereas the financial problems faced by the Duniatex Group are more related to syndicated loans from subsidiaries," said Alip.


Alip explained the issue of PT Delta Merlin Dunia Textile (DMDT) bonds worth US $ 300 million with the first coupon due September 2019 confirmed to be paid.


"The US $ 12.9 million is already available in the interest reserve account and will be paid according to the date set," Alip said.


Alip is of the view that the delay in syndicated loan debt payments is due to a decline in DDST performance due to the dynamic industry conditions due to the indirect effects of the US-China trade war.


In fact, at this time, in order to anticipate global market conditions and maintain profitability, PT DDST has taken a number of efficiency measures including reducing production capacity, even reducing employee overtime.


"However, we make sure the conditions faced by PT DDST, do not correlate with PT DMDT bonds," Alip said.


Financial restructuring


Alip on that occasion did not convey what financial restructuring steps would be taken to deal with the problem. However, the step that will be taken soon is possible to check the performance of 25 factories owned by the company.


The next step is to visit the banks supporting the Duniatex Group to explain the problem.


"Give me time to gather the problems faced. Later we will meet again hopefully there are other things that can be conveyed regarding the company's financial problems," said Alip.


Meanwhile, Donalia targets that by the end of August or early September 2019, there will be concrete and measurable steps to solve the existing problems so that this national company can continue to grow.


As a first step, said Donalia, the company made an effort to improve cash flow first and then accompanied by reducing production capacity and reducing employee overtime.


"We will make every effort so that this national textile company can continue to grow and provide prosperity for tens of thousands of people in Central Java, who depend on our company for their lives. We hope for the support of all parties so that the settlement steps we take can run well, "said Donalia.


Founded in 1974, Duniatex Group has now become one of the major textile companies in Indonesia and has 25 factories that move from upstream to downstream with products produced in the form of yarn spinning, knitting, raw fabrics, finished fabrics, and printing.


The company operates in almost all areas of Central Java district and many people depend on the survival of this company.


Duniatex textile products have entered the domestic and even foreign markets. While the number of workers absorbed in the Duniatex Group reached around 45,000 employees, mostly from the area around the factory in Central Java.



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