Fung, cites rising costs of production, logistics and currency rates.

"Every voluntarily resigned worker will get full severance pay. We have followed the legal rules here. We intend to fully comply with Thai law," Andy Fung, vice president of manufacturing for offshore business at Clover Group, said in an interview with The Nation late last week.

Fung has been sent from parent company to ensure a smooth shutdown of the plant in Bangkok, which faced accumulated losses for six consecutive years. However, Fung declined to disclose the exact figure for the losses, saying only they derived from higher costs caused by higher expenses in terms of labour, extra welfare and other incentives.

The company's labour union, together with 500 workers, marched to Government House on September 6, to submit a letter to the then prime minister Thaksin Shinawatra. They wanted Thaksin to investigate the reasons behind the closure. The parent company plans to move production to lower-cost such countries as China and Cambodia.

The company paid compensation to its workers and employees on Friday to ensure permanent closure by the end of October.

However, almost 1,000 workers have continued to protest at the factory demanding compensation for another six months for their job opportunity losses.

Under the company's compensation conditions, some employees will get the maximum payment of Bt775,000, while staff who worked for three to five years will receive an average of Bt50,000.

The company provided a payment package including wages through to the end of October, severance pay according to their length of service, and payment for unused holidays.

Fung said the production plant in Thailand had been considered uncompetitive due to rising costs of production, logistics and currency rates.

"It is not viable to continue to do business in Thailand due to those factors," he said, adding that the labour union had also demanded higher benefits and extra payments almost every year.

The company produced bras and innerwear for 25 years, with paid-up capital of Bt50 million. It manufactured medium to high-end lingerie under global brands such as Victoria's Secret, Calvin Klein and AB Lindex.

The Clover Group believes production costs in Thailand are no longer competitive, compared with its manufacturing bases in China and Cambodia.

Thailand's minimum wage is Bt184 a day, whereas in Cambodia it is just Bt70.

Fung said the group would also explore potential investments in Vietnam and India.

Peach, 34, a worker at Ginaform, said she was satisfied with her compensation of Bt50,000 after being with the company for five years.

"I feel sad to lose the job because the company paid attractive money and extra benefits such as bonuses, living costs and food," she said.

Peach plans to take a rest for a while before looking for a new job. She is considering applying to work at Thai Garment Export, another Hong Kong-based manufacturer in Thailand.

She said some of her friends were not satisfied with the compensation and six-months extra payment and had joined the protests with the labour union at the factory.

An office-staff worker who asked not to be named said her compensation was fair, having received more than Bt200,000. She added that the company had also extended the deadline for one month to allow the protesters to sign up for the compensation agreement.

"It's quite high, and fair compensation. The parent company has no need to spend a big amount to smooth the closure. In fact, Ginaform has to sell all its assets here to make the severance payment," she said. 

Achara Pongvutitham

The Nation