MAS Holdings has announced plans to cease garment manufacturing operations at its Methliya plant in Thulhiriya and repurpose the facility to expand fabric manufacturing capacity, citing a prolonged contraction in global apparel demand.
In a communication to employees on February 19, management informed staff that the Methliya premises, located within the MAS Fabric Park in Thulhiriya, will be converted to strengthen knitting, dyeing and finishing capabilities. The company said the location is ideally suited for wet processing of fabrics due to existing infrastructure and resources.
As part of the transition, garment production at the Methliya facility will be reallocated to other MAS apparel manufacturing plants in Sri Lanka.
MAS said all 2,200 employees at the Methliya plant have been offered employment and transfers to other MAS facilities either locally or in Jordan. Employees accepting relocation have been offered a three-month salary incentive.
For those who opt not to accept alternative employment and choose to resign, the company said it will provide compensation exceeding the requirements stipulated under Sri Lankan law. In addition to enhanced compensation, all statutory dues will be settled in full, and wages will be paid through the end of April, including the April bonus.
The company stated that the changes are being carried out in compliance with Sri Lankan labour laws and regulatory requirements, with necessary approvals obtained from relevant authorities. It added that employees were engaged through a structured and transparent process.
MAS attributed the decision to ongoing challenges in the global apparel industry, noting declining demand in key export markets such as the United States, the European Union and the United Kingdom. The company said economic slowdowns, high inflation, tariff-related pressures and global policy shifts have affected order volumes across major apparel-exporting countries including Vietnam, China, Bangladesh and Sri Lanka.
The group said it has been reorganising operations to ensure long-term stability, pointing to the recent closure of its facilities in Haiti and the Dominican Republic as part of broader restructuring efforts.
Operations at other MAS facilities are continuing as normal, the company said, adding that any future decisions on resizing local or overseas operations would be communicated directly to employees through appropriate channels.
MAS also cautioned that unverified information and speculation could undermine operational stability and customer confidence. (Newswire)