CHINA: Yue Yuen to boost employee benefit payments
Chinese footwear manufacturer Yue Yuen, which was subjected to a two-week long strike by its workers in April, says it will raise employee benefits this year - a move that will impact on its first-half results.
The Hong Kong-listed firm, which makes shoes for brands including Adidas and Nike, was hit by a US$27m loss as a result of production halting at its Gaobu factory in Guangdong province, in a dispute over the payment of worker social security contributions.
The company now estimates the provision to be larger than originally forecast, reaching $112m. This will be reflected in Yue Yuen's financial results for the six months ended 30 June.
In April, around 80% of the factory's 45,000 staff staged one of China's biggest strikes. It ended when employers agreed to meet some of the workers' demands for better benefits, increasing expenses for the year ending 31 December by around $31m.
In a statement today (6 August), the company said it has reviewed its employee benefits policy in China following the Gaobu factory incident, and has decided to raise contributions for employees at the group's other factories in China.
"The main reasons for making the employee benefit contributions are to assist the group in staff retention and recruitment under the increasingly competitive labour market conditions in China so as to ensure the group's normal business operation and production in the other factories," it said.
The company estimates a provision of around $53m will be made. In addition, it will adjust the benefit payments of employees in those factories and provide them with a monthly living allowance, estimated at around $46m.
Yue Yuen's interim results are due to be published on 13 August.
Yue Yuen Industrial (Holdings) Limited - Strategy and SWOT Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, produ...
Yue Yuen Industrial (Holdings) Limited (Yue Yuen) is an investment holding company. It is one of the world’s largest manufacturers of athletic and casual footwear. The company manufactures, and sells ...
NIKE, Inc. - Strategy and SWOT Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings ......
Nike believes that footwear manufactured using its Flyknit fabric, which was initially launched in 2012, will be one of its growth drivers going forward. Initially launched in running footwear, Nike h...
- SOURCING: Production problems weigh on Pakistan
- What next for smart fabrics and garments?
- Smart sportswear faces mass production challenges
- Frank Henke discusses Adidas sustainability agenda
- Innovation and supply chain remain key for Nike
- “Unsafe” Bangladesh factory refuses to evacuate
- Cambodia labour abuse claims disputed
- Major Ethiopia textile build experiences delays
- Garment factory tool to improve communication
- RFID adoption among retailers near “tipping point”
- Myanmar's Garment Sector - Opportunities & Challenges in 2015
- Apparel Retail: Top 5 Emerging Markets Industry Guide
- Management briefing: Outlook 2015: Apparel industry issues in the year ahead
- Global market review of swimwear - forecasts to 2019
- Outdoor performance apparel: peaks, valleys, and green fields