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Ruentex Industries to close Taoyuan plant, over 300 workers affected

2019/02/23 13:21:42

CNA file photo

Taipei, Feb. 23 (CNA) Ruentex Industries Ltd., a textile production arm of conglomerate Ruentex Group, has decided to close a textile plant located in Yangmei District of Taoyuan City, affecting more than 300 employees.

In a news conference held Friday, Ruentex Industries said it will close the Yangmei factory starting April 26 as it cannot afford further losses incurred by the plant, which reported more than NT$100 million (US$3.23 million) in losses a year for the past three years.

The heavy losses have forced Ruentex Industries to make the decision to close the Yangmei plant, the company said, while market observers agreed the announcement was no surprise at a time of rising competition in the market.

The closure will affect 303 employees of which 162 are Taiwanese workers and the remaining 141 are migrant workers, the textile maker said.

Among the 162 local employees, 93 have chosen retirement and 69 will be laid off, but the company will help the 69 employees to land a job in other operations of the company.

The 141 migrant workers will all be laid off, Ruentex Industries said.

Ruentex Industries said the Yangmei plant accounts for 7.17 percent of the company's consolidated sales in 2018. After the closure, the company will outsource other makers at home and abroad in its textile manufacturing, a move which is expected to lower production costs by 14-20 percent.

The company said it will continue its business and serve as a sales agent for international fashion brands and foreign tea brands.

According to local media reports, Ruentex Industries is transforming itself into a holding company which owns a range of businesses, such as life insurance and biotech development. In addition, the company has invested US$100 million in private equity fund Ho Pu USD Master Fund III, L.P. which has contributed to its earnings, the reports said.

In the first nine months of this year, Ruentex Industries posted NT$11.99 in earnings per share, compared with NT$4.81 in EPS over the same period of the previous year.

(By Jiang Ming-yan and Frances Huang)