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Adidas Group terminates outsourcing agreement
27
Nov '09
The adidas Group confirmed the decision to end its business relationship with SS Venture Inc, Philippines, which manufactures vulcanized footwear product for brand adidas.

The factory is located in Mariveles Economic zone, Mariveles, Bataan, and currently employs around 447 permanent employees and 241 short term contract workers.

It was agreed with the factory owner in early June 2009 that the termination would take place on 31st December 2009.

The decision to terminate the manufacturing agreement is due to a marked downturn in demand for the factory's products. Despite these conditions, adidas Group has continued to place orders with the supplier, to enable a proper phase-out period and to support the workers' ongoing employment.

However, it now appears that the factory owner is unable to secure financing to continue the factory operation beyond November.

“We regret that we have had to take this action, which has its roots in the current economic crisis. We have seen some misleading statements in the press about this business termination, and we hope this statement clarifies our position”, said Horst Stapf, Head of Footwear Sourcing for the adidas Group.

“At this point in time and with Christmas approaching, our primary concern is for the wellbeing of the SS Venture workers and their families and we will continue to engage with the factory and help wherever we can”, added Mr Stapf.

Fibre2fashion News Desk - India

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