Indonesia’s Legendary Tea Producer Declared Bankrupt
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When Indonesians enjoy a cup of hot black tea, they are often reminded of one particular brand that seems to have been around forever: Sariwangi. The brand, established by Johan Alexander Supit in 1962 and introduced by the Sariwangi Agricultural Estate Agency in 1973, has been a household favorite for decades.
The company based in Gunung Putri, a subdistrict of Bogor, West Java, started as tea trader, but soon diversified its business to become a tea producer. Its products were initially in sold in loose-leaf style under a different brand before the introduction of teabags, which changed the way Indonesians drink their tea.
During the 1980s, the company also started exporting its products to other countries in the region and even as far afield as Eastern Europe, Australia and the Middle East.
In 1989, the local unit of multinational consumer goods giant Unilever saw a business opportunity and acquired the brand, changing the styling of the name to SariWangi, and introducing several variants, including jasmine tea, green tea and circular teabags.
The company was still expanding and selling up to 8 million tons of tea per year before it faced an unexpected downturn in 2015. This resulted in Sariwangi and its affiliate, Maskapai Perkebunan Indorub Sumber Wadung (Indorub), reportedly accumulating more than Rp 1 trillion ($66 million) in debt, owed to several lenders.
In the same year, Bank ICBC Indonesia, HSBC Indonesia, Bank Panin Indonesia, Bank Rabobank Internasional and Commonwealth Bank took legal action against Sariwangi to recover the outstanding debt.
This prompted Sariwangi to file a petition for a debt postponement in September 2015. In March the next year, the company filed for bankruptcy in the Central Jakarta District Court, but the court did not reach a verdict at the time.
In August 2016, Bank ICBC Indonesia filed another lawsuit against Sariwangi and Indorub, claiming that the company and its affiliate did not have any intention to repay the Rp 322.7 billion they owed the lender.
On Oct. 16, the court declared Sariwangi insolvent.
Unilever Indonesia corporate secretary Sancoyo Antarikso said on Thursday last week that the consumer goods company was in no way affiliated with either Sariwangi or Indorub.
Unilever said it once partnered with the original company to supply it with tea, but that the partnership had ended long ago.
Questions & Answers
Q.What led to Sariwangi's financial difficulties and eventual bankruptcy?
What led to Sariwangi's financial difficulties and eventual bankruptcy?
Sariwangi experienced an unexpected downturn in 2015, resulting in over Rp 1 trillion ($66 million) in debt. Several banks subsequently took legal action against the company to recover outstanding amounts.
Q.What was the relationship between Unilever and Sariwangi?
What was the relationship between Unilever and Sariwangi?
Unilever acquired the Sariwangi brand in 1989 and partnered with the original company to supply it with tea. However, Unilever states this partnership ended long ago and it is not affiliated with the bankrupt entities.
Q.When did the legal proceedings against Sariwangi begin, and when was it declared bankrupt?
When did the legal proceedings against Sariwangi begin, and when was it declared bankrupt?
Legal action against Sariwangi started in 2015 when several banks sought to recover debt. Following further lawsuits, the court declared Sariwangi insolvent on October 16.
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