GEORGE TOWN: Over five decades after it established an investment presence in Malaysia, Hong Kong-based textile and garment manufacturer, Esquel Group is shuttering its operations here.
The company, which touts itself as the world’s largest woven shirt-maker, is expected to part ways with over 2,000 of its Malaysian staff in Penang and Kelantan.
The company has a global headcount exceeding 50,000 with manufacturing facilities in countries such as Vietnam and Sri Lanka.
The New Straits Times sighted a notice on the closure of Esquel Malaysia, which stated that both the factories here would close on June 12.
“Although we have been operating at a loss since 2015, together with your hard work, we have transformed Esquel Malaysia into a 100 per cent localised company with consistent growth in production scale at our Kelantan factory, making it the company with the largest female workforce in the state,” Esquel Malaysia Sdn Bhd general manager Edward Ho said in a letter to all Malaysian employees.
“However, the sudden outbreak of the Covid-19 pandemic has plunged the world into a standstill.
“While dominant Esquel Group Malaysia’s (EGM) output is shipped to the US market, all of our customers have temporarily closed their retail business since March.
“EGM, on one hand, cannot operate under a country-wide Movement Control Order. Our customers, on the other hand, have to put their current orders and future allocations to EGM on hold.
“With the pandemic situation worldwide keep worsening, we simply do not have enough upcoming orders to sustain EGM’s continued operations,” he added.
In its heyday, the Esquel Malaysia (Kelantan) Sdn Bhd boasted a global client list such as Ralph Lauren, Brooks Brothers, Land’s End, Tommy Hilfiger, Hugo Boss, Fred Perry, Marks and Spencer, Banana Republic and J. Crew.
In 2007, Esquel Group, which also produced branded cotton shirts for Burberry, Nike, Lacoste and Nautica, reinvested US$6 million in its Penang facility after an eight-year absence.
At the time, it was announced that the upgrading of the Bayan Lepas facility was to accommodate the bulk of the company’s manufacturing operations which would be transferred from China.
“While we continue observing the MCO (until April 28) in the meantime, both Penang and Kelantan factories will resume working from April 29 to June 12,” Ho said in his letter.
“During this special time, our top priority is the health of you, your family and your welfare.
“A compensation package has been approved by the management of the Esquel Group for your entitled benefits as well as salary payment up to your last day of service, or accordingly to your notice period, whichever is longer,” he added.