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Mauritius : High labour cost leads to textile job cuts |
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2004-8-10
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Seven factories shut and 900 jobs lost. That is the story for one of the oldest textiles operator in the island nation.
The operator in question is Floreal Knitwear, which finds high labour costs as reason for cutting jobs.
Second reason for the reduction is heat faced from competitor countries like China and Bangladesh, which manufacture and dump low cost products in major buyer countries like USA and EU.
Floreal produces textiles for BHS and Littlewoods in the UK. It now has five factories in Mauritius and employs 3,100 people.
Nicolas Maigrot, executive director said the emphasis of the Mauritian business was now on producing value-added products, which required less labour.
"Basic products are no longer competitive in Mauritius, it is very difficult to maintain value as before," he said.
"We see our de-localisation as complementary to our activity in Mauritius. It is not a substitute, it is complementary.”
So far, Mauritian textile industry employees 80,000 people, down from 90,000, last year.
Madagascar is one destination for migrating production bases where low labour costs ensure profitability, but the political instability there led textile operators to look towards other Asian countries according to Danielle Wong, director of Mauritius Export Processing Zone Association.
Job losses are set to continue, with one industry organisation anticipating a further 30,000 lay-offs before the situation stabilises.
The way forward for the Mauritian textile industry is to concentrate on niche products, which require highly trained staff and heavy investment, she said.
"We have to go upmarket, we have to look for sophisticated design products," she added.
Early this year, closure of hundreds of Ralph Lauren outlets badly hit the textile industry.
The shops were shut permanently after Ralph Lauren claimed that the shops had been using its trademark without permission. |
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