ITC garments factory in Nepal shuts down after labour trouble

May 29th, 2009 - 4:20 pm ICT by IANS  

By Sudeshna Sarkar
Kathmandu, May 29 (IANS) Indian tobacco major ITC’s NRS 250 million, state of the art garments factory in southern Nepal has been shut down indefinitely due to security concerns after disputes with a Maoist labour union.

Ravi K.C., corporate general manager at Surya Nepal Pvt Ltd, a joint venture in which ITC owns majority shares with the rest held by British American Tobacco and private Nepali investors, told IANS that talks have begun Friday to resolve the problem.

The trouble started after the authorities decided to fire a worker at the garments factory in Biratnagar town. The dismissed employee is said to be backed by a Maoist trade union that reportedly threatened to shut down the factory if he was not reinstated.

On Thursday, the management decided to shut down the factory indefinitely citing security concerns.

Surya Nepal, one of Nepal’s blue chip companies and the second highest tax payer, is also Nepal’s leading tobacco manufacturer.

From 2004, it diversified into manufacturing garments with leased capacities to manufacture the John Player label of men’s clothing for ITC Ltd India.

Three years later, the foundation of a state of the art garments factory was laid at Biratnagar to produce John Players, Springwood as well as Miss Players brands of clothing not only for export to India but also for aggressive marketing in Nepal.

The garments factory employs mostly women and can produce over 4,000 pieces daily.

Last year, Surya Nepal’s tobacco factory in Simra, also in southern Nepal, was shut down by labour unions who demanded a rise in pay and perks.

During the 10-year People’s War fought by the Maoists, Surya Nepal and other leading Indian joint ventures had been frequently targeted by the rebels.

Though the Maoists signed a peace pact in 2006 and promised to lay down arms as well as stop industrial strikes, the promise has been frequently violated.

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