Unilever considers closing operations in Sri Lanka
64 year old production operations in Sri Lanka as rising costs and
labour action choke...
Consumer products giant, Unilever NV, is considering an end to its 64 year old production operations in Sri Lanka as rising costs and labour action choke growth and cut profits, Bloomberg News reports. Unilever Ceylon Ltd., the group's Sri Lanka unit, said it may shut its production facility on the island if the unions keep disrupting its operations with lunchtime protests and threats to strike as they seek higher wages. The company said it would import its products and maintain marketing and distribution operations on the island. Unilever Ceylon chairman Mike Thompson told Bloomberg News, "It is cheaper for us to import some of the products from India and sell them here." For Unilever, that would mean leaving a business that makes Lux soap, Signal toothpaste and Lipton tea in Sri Lanka since operations started as Lever Brothers Ltd. in 1937. The island, which is the world's largest tea exporter, is a more expensive place to produce tea than India. For several months negotiations between a section of the 2500-strong labour force union and Unilever have been carried with no agreement as yet.