At least 2,000 workers, mostly rural youth, will lose their jobs owing to the closure of Sinotex (Lanka) Ltd, a 27 year-old garments factory and among the oldest at the Katunayake IPZ, from January 14.
In a public notice this week, the Board of Directors of the company said the decision to close the factory was taken due to the reduction of export orders from the US market last year. A senior official of the company told The Sunday Times FT that Elegance Industrial Co. Ltd, a sister company of Sinotex, had tried every avenue available to secure orders to fill up the production capacity during the past nine months but failed to gain expected results due to the current economic situation in the US.
Joint Secretary of Free Trade Zone and General Services Employees Union Anton Marcus said Sinotex workers have been asked by the management to attend a meeting tomorrow to brief them on the present situation of the company and the package of compensation granted to them. He added that the company has so far failed to discuss with the Labour Department on the payment of statutory dues for employees including the compensation formula.
He said that his union will take all necessary action to ensure the legal rights of all employees in consultation with the management, BOI and the Labour Department. He added that it is unfortunate that this company which carried out its operations for nearly three decades had to close down due to the lack of export orders.
With a capacity of 45,000 dozens per month Sinotex has produced knit tops, pants, casual shorts, skirts, dresses, baby wear for the US market. The Crystal Group of Companies, the parent company of Sinotex is one of the largest internationally reputed companies in the garment manufacturing industry since 1981 headed by Kenneth Lo.