COLOMBO:
Delivering a severe blow to Sri Lanka’s apparel industry, the management of MAS Holdings—a premier conglomerate owned by the Amalean family—has reportedly decided to shut down two more of its factories and scale down the workforce in another, Sri Lanka Mirror learns.
According to a planned phased retrenchment strategy, the conglomerate aims to reduce its current workforce of nearly 96,000 down to 70,000 in a bid to return to profitability. This drastic move is set to result in approximately 26,000 employees losing their livelihoods.
Factory Closures and Impractical Transfers Under the strategy of closing standalone facilities, the ‘MAS Kreeda Methliya’ plant at the MAS Fabric Park in Thulhiriya was recently shut down. Sources indicate that the ‘MAS KREEDA Vaanavil’ facility in Vaanavil is next in line for closure, followed by ‘MAS Active’ factories located within Free Trade Zones. Furthermore, a workforce reduction is planned for the ‘MAS Bodyline’ facility situated on the Ratnapura road in Horana.
Although MAS Holdings is expected to offer displaced workers three months’ salary, severance pay, or transfers to other facilities, anonymous former employees told Sri Lanka Mirror that these offers are highly impractical. For instance, offering a worker who just lost their job in Thulhiriya a transfer to a factory in Ratnapura is seen as an unfeasible alternative.
Global Brands and Muted Labor Rights The end products of MAS factories cater to world-renowned apparel brands such as Victoria’s Secret, Nike, Adidas, Lululemon, Calvin Klein, and Tommy Hilfiger. Industry experts point out a stark irony: while these global brands highly prioritize labor rights, manufacturing giants like MAS lack a forward-looking approach regarding the job security of their workers.
Adding to the controversy, trade unions are strictly prohibited within MAS factories, posing a significant barrier for workers to collectively stand up for their employment rights.
Reaping BOI Benefits and Shifting to India These MAS factories were established under the approval of the Board of Investment (BOI) of Sri Lanka. Despite reaping massive profits over the years through unlimited tax concessions, the company is now opting to shut down local operations, essentially discarding the local workforce after extracting the maximum benefit.
Reports reveal that many of the factories closed in Sri Lanka will be relocated to India. Driven by geopolitical shifts and profit consolidation strategies, companies are attracted to India—the world’s 4th largest economy—due to its significantly lower labor costs, advanced technology, and cheaper utility rates (like water and electricity) compared to Sri Lanka.
“Coffee with Editors” and Government Inaction Meanwhile, trade union leaders and apparel industry experts allege that the management has been using PR tactics, such as “Coffee with Editors” meetings with heads of major media outlets, to numb the public discourse and suppress the real narrative surrounding these massive factory closures.
Stakeholders also point fingers at the government for its failure to intervene effectively when President Donald Trump increased import tariffs. They argue this negligence is the reason Sri Lanka couldn’t match the tax advantages offered by India. Experts warn that unless the government urgently focuses on securing bilateral and multilateral trade agreements, the future of the industry will be even more disastrous.
Source: Sri Lanka Mirror