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.