A Quebec-based apparel factory has decided to shut down all five of its units in the month of July, thereby rendering over 400 workers jobless.
Vêtements RGR, which is based in the Beauce area of Quebec, has been engaged in the manufacturing of denim and several cotton-based products since its inception in 1974. It was established by Rolland Veilleux, Guy Couture and Roger Veilleux.
The factory management has cited the soaring competition from China as the major reason behind its closure. The company has taken the decision to close down its units in mid-summer once it delivers the orders which it has got currently.
Cotton prices have increased almost by three times over the last one year. Cotton prices began surging in August, 2010 after the adverse weather conditions have lowered the cotton production estimates in the major cotton producing countries of the world like China, the US, Pakistan and Australia.
Profit margins are narrow in the apparel manufacturing sector. Raw materials usually account for 25 to 50 percent of the manufacturing cost of making single apparel. Cost of labor ranges between 20 to 40 percent depending on the basis of apparel design.
The company once had over 11 plants situated all over the region and provided employment to more than 2,000 workers.
Three of the company's units are situated in St. George, whereas the other two are located in the adjacent towns of Saint-Honoré and Saint-Joseph-de-Beauce.
Fibre2fashion News Desk - India
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