Workers have vehemently opposed the shut-down decision and have even started a relay hunger strike demanding the management to restart productions. How is the management responding to this situation?
We had started the factory when insurgency was at peak and the country´s garment industry was in tatters. Despite odds, we had invested around Rs 700 million, set up manufacturing unit of international standard and trained and employed women. We had not made all those efforts to see this ill fate. We shut down the factory because we lost orders and got clear signal from buyers that they will not place any order in the future as well. So, for what are we to resume its operations? The factory is not a charitable institution; it is a business. We have repeatedly informed this to the workers. Sadly, workers have refused to understand us. As their strike cannot help us regain the lost business, it will not result in reopening of the factory.
Was labor unrest the sole reason behind the closure decision or were there some other issues too?
We decided to shut down mainly because we could not tolerate the workers acting violently, something which put the lives of the management staff at stake. However, there were other problems too that were gradually hurting our business. Demand from international markets had begun dropping since 2007. Problems like strikes, industrial insecurity, and power crisis, among others too compounded our troubles. We were failing to deliver garment products on time. We were already discussing what to do with the factory. So, when the labor trouble escalated this year we saw no point to carry on the operations.
Despite closing down the factory, Surya Nepal has said it still continue production by sub-contracting the orders to other manufacturers. Why?
We shut down the factory because we lost international market. But we were also fulfilling local demands by subcontracting orders to other local manufacturers. We never produced garments from our factory for the local market. As demands for our brands are encouraging in Nepal, we have decided to continue with this segment of business. We took this decision purely considering the business prospect. Our subcontract was enabling local manufacturers create employment for more than 60 people. And till the prospect is there, we do not want those workers to lose their jobs.
Does it mean Surya Nepal will jump back in the garment exports if things turned favorable in the future?
We have put in a lot of hard work and capital in the garment factory and to be in the garment business. We will always explore possibility of reviving the business. But that will not happen in the immediate future. The country must restore good industrial climate and assure investors that their investment will be secured for us to jump back again in the garment export business.
What are the management´s divestment plans?
We haven´t worked out any divestment plan so far. We will take some time to decide on it.
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