Conwep, Luenthai hopeful to rebound in 2024 after retrenchment

By Kris Crismundo

May 6, 2024, 6:05 pm

MANILA – The Confederation of Wearable Exporters of the Philippines (Conwep) and apparel manufacturer Luenthai are optimistic to rebound before 2024 ends or by the early part of 2025, following the latter’s recent retrenchment.

In a virtual briefing Monday, Conwep executive director Maritess Jocson-Agoncillo confirmed that Luenthai’s factory in Clark, Pampanga retrenched some 2,000 workers on April 26.

Some Philippine-made apparel exports, including the shipment of Luenthai, were detained in United States borders due to the concern that the cotton used for making the goods came from Xinjiang, China.

The Uyghur Forced Labor Prevention Act (UFLPA), a US federal law, bans garments that make use of cotton produced in Xinjiang due to forced labor issues.

The issue was among those discussed with US Commerce Secretary Gina Raimondo, who was in the Philippines on March 11 and 12.

Agoncillo said that as of February, detained shipments have amounted to around USD5 million with half of the shipments released by the US “a few weeks ago.”

“Despite our strict adherence to UFLPA-compliant sourcing practices, we are currently being required by CBP (Customs and Border Protection) to prove the origin and production practices of all elements of our supply chains, which has led to prolonged delays in clearing recent US shipments, causing significant business interruption and order losses,” Conwep and Luenthai said in a statement.

The statement added that due to business disruptions, the company can no longer maintain its Clark factory in full capacity.

Agoncillo said L&T International Group Philippines Inc. Clark is running approximately between 20 to 30 percent of its total capacity following the retrenchment of the 2,000 workers.

“It’s not closed… They intend to rebound… They intend to get back on their feet, hopefully by end of the year or first quarter of 2025, but they are not shut down,” Jocson-Agoncillo said.

She added that once the company rebounds, it will start rehiring workers. (PNA)