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| Sunday, 24 February 2002 |
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| News Business Features Editorial
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Fall in demand for tea bags led to closure of factory - Unilever Employees of the Mabole Unilever value added tea factory, which was closed on February 6, will be paid their wages until the Labour Commissioner gives a ruling on a compensation package, a Unilever Ceylon news release stated. It stated that the closure will only affect the export business. It will have no impact on Unilever's domestic tea operations. The news release said: "In early November 2001, the relevant unions were informed that the factory operations were no longer viable due to drastically reduced order volumes. So a compensation package of 40 months salary was offered. On this basis, employees could get up to 70 months salary including gratuity. This is the same scheme negotiated with the union for the workers of the Grandpass site. The unions at Mabole did not accept this offer and thereafter the company made an application to the Labour Commissioner for termination of the employees under the provisions of the Termination of Employees Act. All operations of the factory ceased by end December 2001. Following unruly behaviour by some of the employees, the factory was closed down on February 6." The Lipton and Brooke-Bond factory at Mabole, established in 1991, had a workforce of 518 including managers and supervisors. It was primarily a tea bagging centre for exports. In 1998, the factory produced 2,200 MT of tea bags. According to the news release, orders declined due to the crisis faced by the Russian economy. Consumer countries also established tea bagging factories in their own markets as it is cheaper to buy tea in bulk and then produce tea bags. The anticipated tea bag volume for the factory by end December 2001 for 2002 was less than 300 MT. However, the actual demand for tea bags for the year so far is 50 MT for the domestic market and 20 MT for export. The volume of bulk tea blended in the factory fell from 20,000 MT to 3,000 MT in 2001. |
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