May 27, 2008

Garment customers threaten to pull out

Garment customers threaten to pull out
27 MAY 2008 -

Efforts by a garment factory in Fiji to increase the prices of its garments have been resisted by its customers.

Mark One Apparel boss, Mark Halabe, said their customers had resisted any intention to increase garment prices by threatening to pull out of Fiji.

Halabe says their competition is from China where the currency used for exports is the $US dollar.

“Over the last two years the $US dollar/$AUDI has been in the favour of Australia of at least 30%. While in 2010 Fiji's trading preferences into Australia will decline by 7.5%,” he explained.

Halabe said their customers saw Fiji as an expensive manufacturing country and with any increased cost of doing business, such as the Employment Relations Bill, was of no help.

“It doesn't help our ability to increase export sales, increase employment or investments,” says Halabe.

Halabe said with the introduction of the ER Bill, his company stood to lose $160,000 each year for the maternity clause, doubling of sick leave pay, redundancy and bereavement clause.

“On a payroll of over $2.5m this is not an insignificant amount of 6.4%. In addition employers have had to pay increases in wages and salaries which would be in the same order over the last 12 months. So increases of near 13% are simply unaffordable to our international customers,” he said.

Halabe has called on the government of the day to offer business owners some relief by means of a 150% tax deduction.

Another option it has suggested in which the interim government can assist is for to offer to pay 50% of maternity pay or allow the employee to fund 50% from their FNPF funds.

Halabe says the ER Bill has other costs that the media has not picked up on including the doubling of the allowable sick days, redundancy pay and the softening of the definition of bereavement pay.

“All these additional costs only hinder Fiji's ability to compete in the international market as there was no productivity offsets,” he said.

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