The textile industry is not out of its difficult situation yet. The redundancies at Sentosa Enterprise Ltd show that the loss of employment caused by the general crisis in the textile sector is continuing… However, other “good news” conveys a more positive atmosphere in the whole sector although they all know it is far from being a solution to all problems (see inset).

The Sentosa factory had to close down last week – the main consequence being 1,000 job losses. 497 Mauritians are concerned by the closing down but Ciel Textile has announced that it could well employ 200 to 300 people.

Sentosa Enterprises Ltd, from Singapore, was established in Mauritius in 1988 and specialised in the making of T-shirts. But 17 years later, the company realised it could not face the production and labour costs as well as the “long” export delays. Some of the units – Roches-Noires and Lallmatie – have already closed down while others, such as Fond du Sac and Triolet, will see their deadline expire on 31st August.

The management has already announced that all employees will receive compensation. Those who have worked for less than three years will be granted two weeks’ salary in lieu of notice while those who have worked for a longer period will obtain the equivalent of three months’ salary.

As for the severance allowance, each employee having worked for less than three years will get one week’s salary for each year. Others will receive two weeks’ salary. The workers should also obtain the refund of their local and sick leave as well as the end-of-year bonus on a pro rata basis. Moreover, an additional compensation – between one to six months’ salary – will be paid to those who have worked for longer periods.

<B>Mauritius may benefit from quotas on Chinese textiles </B>

Millions of trousers and bras from China have been barred from entering the EU because of the quotas imposed by the European commission last June. This happened after the Chinese manufacturers agreed to limit their export growth until 2007. And they have reached their limit. If this situation is giving a real headache to both the Chinese and European firms involved, Mauritian stakeholders are rejoicing. As Chinese orders have been blocked in the port, the Europeans are looking for other suppliers. But the Mauritian firms may not feel the positive effects immediately. “What is interesting for us is that purchasers will have to change their strategy and sread out their orders over different countries to avoid taking too many risks,” says Nicolas Maigrot, manager of Floréal Knitwear. But Mauritians should not cry victory. Prices have dropped by two euros with the competition from China and the European Commission could well change its mind if there is a risk of shortage…