THE impending increase of the national minimum wage on April 1 could be the final nail in the coffin of a Nadi garment factory that was forced to shut down its Ba branch last year.
Nagsun Apparel (Fiji) Pte Ltd production and sales manager Shabana Azmin said last year’s minimum wage increase in August had placed more pressure on the company which was already struggling with increasing production costs and a declining client list.
“Garment manufacturing companies are at a stage where their survival is under threat,” said Ms Azmin.
“We are in a situation of decline with our incoming orders as it is not easy to get new clients.
“The next wage review in April is another threat for us, whether we would be able to maintain the existing clients or lose them.”
Ms Azmin highlighted the impact of government decisions such as increasing the national minimum wage on garment factories.
“We have to ensure that the decisions made are based on facts that will help create more job opportunities in our country.
“Factories have no choice but to close because it’s not easy to cope with wage rises and all these extra levies in (the) ERA (Employment Regulation Act).”
Ms Azmin said the company has had to implement measures such reducing work hours to stay afloat and keep workers paid.
“Currently, we are only operating our main factory that is in Nadi, but it’s not easy because the inflow of orders is reducing day by day. We are trying our best to keep our factory operational by providing staff with regular hours of work, but with the lack of work also results in reduced hours which we try to avoid as much as possible.”
Ms Azmin said with the new minimum wage in April, they would have to increase their costs for clients which, according to initial responses, could lead to more losses.
“As we are already in March, we are giving a heads-up to clients on the price increase that can result after the next wage increase in April. But looking at their response, things don’t look in our favour at all.
“Clients are not ready for the increase based on wages since they also consider other costs like freight when they do offshore production, and for them to work with Fiji factories, they look forward to lower costs which, if not maintained, they have no option but to move away.”
