Jute factory promises to compensate workers
Executives of a Yangon jute factory that closed down amid heavy losses says the company will compensate more than 300 workers it dismissed.
EXECUTIVES of a jute factory that folded in 2015 due to losses of up to K700 million (US$460,000) annually said Sunday they would compensate the over 300 employees they dismissed last week, insisting the closure was necessary.
“We lost K600 million to K700 million every year in operating expenses, including wages for workers,” said U Hla Thein, director of finance for Kyaw Htet Kyaw Co, which ran the former state-owned jute factory.
Kyaw Htet Kyaw sacked 314 workers on January 9, and the workers are demanding that the company rehire them.
The executives said the company had a long-term contract since 2012 to lease the jute factory and its over 50.5 hectare (125 acre) compound for K350 million a year.
According to the workers and the company, the 314 factory workers quit as government staff and took pensions from the government when the factory was transferred to the private company in 2012.
The executives said they had to close the factory in 2015 because of poor demand for jute and a shortage of raw materials.
They noted that jute farmers had shifted to other crops that gave them more profit.
They said they have revised the lease agreement with the government so they can run other businesses to employ the workers.
Although the company has been allowed by the Myanmar Investment Commission to run other businesses in the factory compound, it cannot start new businesses because the land had been confiscated by the government after the 1962 coup.
They added that the Agriculture and Irrigation Department, which rented the factory to the company, did not have the rights to the land.
“All workers have been paid for over six years despite the factory having no earnings. The company could no longer shoulder this burden,” jute factory manager U Myo Tin said.
The executives said they shut down the factory with the permission of the Ministry of Home Affairs, Ministry of Labour, Ministry of Agriculture, Livestock and Irrigation, and the Yangon regional government.
Workers at the factory earlier said the company is earning a lot of money every month by renting out the compound to other businesses for parking, storage facilities, and a golf course. But the executives said they just continued the businesses started by the department when it took over the factory.
Among the businesses the company plans to undertake are a convention centre, vocational training centre, container yard, commercial complex, pharmaceuticals factory, cold storage, according to U Win Paing, the company’s marketing director.
Executives of Kyaw Htet Kyaw Co. hold a press conference on Thursday.