Textile manufacturer PT Pan Brothers Tbk. (PBRX) postponed its production capacity expansion plan because it is still undergoing a debt restructuring process. In a recent development, the United States Bankruptcy Court Southern District of New York approved the Chapter 15 order filed by the Pan Brothers. Pan Brothers Corporate Secretary Iswardeni said that this had forced his company to postpone its production capacity expansion plan to 130 million pieces from the previous 117 million pieces. He said the capacity expansion infrastructure was already available. In addition, demand is also high, with the domestic market being enlivened by the Idul Fitri and homecoming momentum. However, this restructuring process still makes it difficult for the company to move.

"[Capacity expansion has been postponed] Next year. The demand is very large, but we can't [speed up production], because the development order is six months at the earliest. So the fourth quarter is the earliest," said Iswardeni when contacted, Thursday (21/4/2022). ).

It is understood that approval of the Chapter 15 injunction allows representatives in corporate bankruptcy cases that have been filed outside the United States or also known as "cross-border bankruptcy" to gain access to the US court system.

Clause 2.7 of the Scheme Document Agreement states that approval of the Chapter 15 submission in US Courts is a condition for the effective date of PBRX restructuring. It also ensures that the restructuring proceeds according to the scheme approved by the Singapore High Court.

Contacted separately, Executive Secretary of the Indonesian Textile Association (API) Rizal Tanzil Rakhman said domestic-oriented businesses are enjoying a surge in demand due to improving economic conditions and driven by the momentum of Eid.

Textile performance in the first quarter and the first compliant this year is projected to grow positively, continuing its expansion in the fourth quarter of 2021.

"I think because the pandemic period will end and people's activities have returned to normal, it will encourage growth," he said.

Throughout last year, the textile and apparel industry recorded a contraction of 4.08 percent year-on-year (YoY). However, in the fourth quarter of 2021, the performance of this sector has been controlled with growth of 5.94 percent.