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Yue Yuen to Improve Worker Benefits

Yue Yuen Industrial Holdings Ltd., the Chinese footwear manufacturer for Nike and Adidas, said it would dedicate $112 million to improve employee benefits. The company, which grappled with one of China’s biggest worker strikes earlier this year, said the provision would have a material impact on its first-half results.

Chairman Lu Chin Chu said, “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.”

Reuters reported that the amount is bigger than the initial estimate of $37 million made in May to aid employee benefits at the company’s Gaobu factory.

Thousands of Yue Yuen workers went on strike for two weeks in April when an employee discovered that the company had been underpaying its social security contribution. They returned to the factories only when the company agreed to their demands for better benefits. The stoppage cost Yue Yuen an estimated $27 million.