CFL suspends operations at MEPZ-SEZ

Chennai, May 26 (UNI) Leading garment exporters Celebrity Fashions Ltd. (CFL) has suspended its operations at the MEPZ-SEZ facility near Tambaram, about 25 km from here, due to mounting losses.

A company release said CFL, which began its operations two years back, has been incurring losses right from inception due to discontinuance in business by two major customers resulting in under utilization of capacities and high fixed cost base of the plant.

Strong appreciation of Indian Rupee against US Dollar which took a heavy toll on the bottom line, inefficiencies in manufacturing and low production efficiencies caused by non co-operative work force, also contributed to the losses.

CFL resorted to various measures to reduce the operating losses at the plant, including conversion of the plant into single shift from the present double shift, rationalization of manpower including re-location, reduction in managerial and supervisory staff in line with the Man-Machine Ratio and reduction in overtime and reasonable increment for workers for the 2008-09 fiscal with no increments to factory and office staff.

The above measures have been resisted by the workforce at all levels and has resulted in low productivity, high wastage of raw materials and finished goods, short shipments and slow down in work.

Also, there has been a stoppage of work by 149 workers at the plant in support of 22 workers who have refused to accept the transfer orders to other locations. About 800 workers resorted to illegal strike outside the plant and also prevented others from attending to their work.

''In spite of all the earnest efforts and attempts by the management to restore normalcy, the workers have not responded and the management has decided to suspend the operations at the plant after a detailed analysis of the situation.'' UNI GV GKT 1550