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Strike at SL eats into profits

Strike at SL eats into profits

Because of ongoing strikes and an inability to fill orders, SL Garment Processing (Cambodia) says it is shedding cash flow as buyers shift away from one of Asia’s largest producers, factory management confirmed yesterday.

International brands H&M and Gap reduced their orders, while Levi’s ceased buying from SL in August, said an SL representative who declined to be named because of heightened tensions over the strike. Neither SL nor brands would disclose the value of orders.

“Because of C.CAWDU’s [Cambodian Apparel Workers Democratic Union’s] endless strike at SL, we are unable to keep the shipment date. How can we process the order for the buyers?” the representative said.

The company said it has lost more than $1 million since the strike began on August 12.

Kong Athit, vice-president of C.CAWDU, said the onus is on factory management to meet demands so operations can resume again.

“The responsibility is on them, not on the worker; the worker does not want anything extra, they just want normal work,” said Athit, referring to the slowdown in SL’s business.

Workers are primarily demanding that military police at SL are removed and for the factory to cut ties with a shareholder, Meas Sotha, who they say hired the guards.

Ken Loo, the secretary general of the Garment Manufacturer’s Association in Cambodia (GMAC), said that there are two kinds of buyers: Those that stick by factories in times of dispute and demand a resolution, and those that leave “at the first inkling of trouble”.

“There are those that actually put pressure – those are considered the good buyers – and the bad the buyers just cancel orders,” he said, adding that in the case of Levi’s, the denim jeans brand had stayed with SL through a history of labour disputes.

Levi’s confirmed yesterday that it currently has no presence at SL, but declined to comment on the strike. H&M also declined to comment other than to say that order volumes with suppliers vary over time. Gap did not immediately respond to questions about its orders with SL.

Close to 2,500 C.CAWDU members of the 5,800 workers at SL are on strike, according to the union. Workers are also demanding a return to an eight-hour daily schedule they say has been extended to nine hours, a $3 meal allowance, and wages for the strike period.

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