MASSIVE job losses are looming at leading textile manufacturer, Nien Hsing International.
This amid revelations that the company will next month retrench at least 2500 workers to manage costs due to the Covid-19 induced slump in demand for denim products. This will leave the company with just 500 workers.
Nien Hsing manager Ricky Chang this week told the Lesotho Times that the factory was suffering from a serious shortage of orders from buyers.
The factory’s main market is the United States (US) which it has accessed courtesy of the African Growth and Opportunity Act (AGOA) trade concession which allows Lesotho to export products duty-free to that country.
Nien Hsing manufactures jeans for top US clothing brands like Levi Strauss and Co among others.
The factory is part of the larger Nien Hsing Textiles group, which originates from Taiwan. The group has four textile manufacturing factories in Lesotho, which collectively employ about 10 000 workers.
The four factories are Nien Hsing International, Global International, C & Y Garments, and Formosa Textiles. The fifth factory, Glory International closed last year sending home 1500 workers.
AGOA is a unilateral trade concession by the US which gives duty-free and quota-free access to the US market to eligible Sub-Saharan African countries including Lesotho.
It was renewed for another 10 years in June 2015 as the AGOA Extension and Enhancement Act and amended to allow the US to withdraw, suspend or limit benefits if designated AGOA countries do not comply with its eligibility criteria.
Although Mr Chang could not be drawn into revealing more details on the impending job losses, he said the management and the workers’ representatives are currently engaged in negotiations.
“What I can tell you is that there is an operational challenge with one of our factories which is experiencing insufficient orders from buyers,” Mr Chang said.
“At the moment, we are engaging with our labour force’s representatives regarding the way forward. We will make an official announcement once we have completed the process.”
One of the labour unions involved in the matter told the Lesotho Times in confidence that the workers were worried about the looming retrenchments as thousands are likely to be left destitute.
He said they were trying to persuade the factory management to reconsider its decision to retrench workers.
“We understand that about 2500 workers will be retrenched and only 500 will remain employed. But we do not want that to happen.
“We are currently in talks with the management to convince them to reconsider their decision because this would be a crisis to have 2500 people losing their jobs at the same time,” he said.
The unions are also scheduled to meet representatives of the factory’s buyers to come up with ways of saving jobs.
“On Thursday (today) we are scheduled to meet with the representatives of the buyers of Nien Hsing products to save the workers’ jobs.
“The factory management has already developed an action plan for retrenchment, in which they are planning to start retrenchments in May and complete them by June 2021.
“They will release the first batch of workers from the cutting department in the second week of May. Sewing workers will follow after two weeks and then by the beginning of June, they will release workers from the packing department.
“Workers in the washing and boilers departments will however, not be affected by the retrenchments.”
Nien Hsing’s production bases include Taiwan, Vietnam, Cambodia, Mexico, Nicaragua, and Lesotho.
The group opened its factory in Lesotho in 1990 with C & Y Garments at the Ha-Thetsane industrial area. Nien Hsing International was opened in Lesotho in 2001.