Letwar Garment Factory 2 in Hlaing Tharyar industrial zone announced suspension of its operations on Wednesday, said Ko Naing Lin, leader of the factory labour union.
In January, workers at the barely two-year-old plant went on strike after alleging unfair labour practices.
In its notice to shut down, the factory’s management said the economic slowdown in China due to COVID-19 had caused a decline in orders.
“One month after the strike, we took photos of people carrying raw materials to its sister factory in Hlegu,” Ko Naing Lin said. “Before getting permission to close, the factory transferred all its raw materials.”
Letwar Co operates three factories in Hlaing Tharyar.
The factory will close on April 6, and employees were given a month’s notice that they will no longer need to come to work. On April 6, the workers will be paid for March and compensation according to the law, the company said.
Letwar Garment Factory 2 is the second to shut down this month due to COVID-19. On Monday, Myanmar Royal Apollo garment factory in Shwe Pyi Thar township declared bankruptcy after allegedly running out of raw materials.
The notification of the bankruptcy was posted on the Facebook page of Yangon Region Hluttaw MP Daw Sandar Min.
Daw Myo Myo Aye, director of the Solidarity of Trade Unions in Myanmar, said the unions will closely monitor developments in the factory closure.
The factory opened in May 2016 with an investment of K400 million (US$299,000) but suffered net losses of K400 million as of March 5.
The factory was shut down and all its equipment is reportedly still inside. If the equipment is sold, the factory can pay the workers’ back wages and some compensation, the notification said.
The factory has been sealed, according to the township administrator, and will be auctioned.
Other factories have laid-off workers with redundancy payments, such as Sino Proud garment factory.
Seven factories in Bago Region will lay-off workers this month, and another seven will cut their workforces next month.
Myanmar has 262 Chinese-owned garment factories, more than 20 Myanmar-owned factories, 60 Japanese-owned factories, and more than 20 South Korean-owned factories, the Confederation of Trade Unions of Myanmar said.
Workers have set up a team to check whether the factories have shut down due to a lack of raw materials or are just trying to dodge labour disputes. – Translated
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March 16, 2020 at 09:57AM
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Workers cast doubt on reason for factory shutdown in Yangon - Myanmar Times
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