HONG KONG Aug 6 Chinese shoe manufacturer Yue Yuen Industrial Holdings Ltd, hit by strikes this year, said it expected to book a $112 million provision to improve employee benefits that would have a material impact on its first-half results.
The amount is bigger than a preliminary estimate made in May of a $37 million provision for an employee benefit programme at its Gaobu factory. Yue Yuen, which is controlled by Taiwan-listed Pou Chen Corp, said it had decided to improve benefits at its other factories in China as well.
Thousands of Yue Yuen workers staged one of China's biggest strikes this year. They agreed to go back to work in April after the maker of footwear for companies such as Nike Inc and Adidas agreed to meet some of their demands for better benefits.
"The main reasons for making the employee benefit contributions are to assist the group in staff retention and recruitment under the increasingly competitive labor market conditions in China so as to ensure the group's normal business operation and production in the other factories," Chairman Lu Chin Chu said in the statement.
The company posted $194.5 million in net profit in the first six months of last year. It is due to announce first-half earnings on August 13. (Reporting by Donny Kwok; Editing by Edwina Gibbs)