Denim manufacturer Nien Hsing Textile Co is in the process of terminating 2,500 workers from its C&Y Garments, Formosa Textiles, Global International and Nien Hsing International factories in South Africa. A fifth, Glory International, sent home 1,500 workers when it shuttered last year. As per a Sourcing Journal report, Nein Hsing Textile has laid off 4,000 workers over the past year, the result of a dearth of orders from American brands, the rising cost of salaries, unrest in South Africa and an ongoing pandemic.
The company manufactures jeans for reputed brands like Levi Strauss, Wrangler and The Children’s Place. It blames the negative impact of COVID-19 and other market forces for the job eliminations. Recent wage protests also precipitated a loss in revenue by crippling the company’s production, while fluctuating COVID-19 infections and riots in neighboring South Africa following the arrest of former president Jacob Zuma contributed to an uncertain business environment that made it difficult for the company to continue operating.
Most of Nien Hsing’s output is destined for the United States, where it benefits from the African Growth and Opportunity Act’s duty-free access for thousands of products, including apparel and textiles.
