Chilean textile firm closes down
Despite recent protests from students, Chilean woollen goods producer Bellavista Oveja Tomé decided to close its operations earlier this month. President of the board, Miguel Otero, said that this was because of the serious financial difficulties it was facing. It hit a major stumbling block when its main customer – which accounted for 20 per cent of Bellavista's sales – decided to discontinue its relationship with the company. Moreover, production and operational costs were exceeding sales prices because of the exchange rate in addition to high electricity and wool prices.
Mr Otero said: "Our main customer's decision has rendered our negotiations with the bank non-viable and our only option was to close down, realising our worst fears. We believe this customer's decision would have caused a domino effect, which would have led other clients to do the same."
"People must not forget that, in the 1980s, the textile industry and other sectors were either annihilated or seriously damaged by the dollar exchange rate that was kept at CLP39 for three years," he added.
The company employed 750 workers and was the main economic provider in the district, contributing CLP225 million per month to the country's economy in salaries alone. It announced that it will be unable to pay November wages and has cancelled half of the cash advance requests from employees. "The social cost of the closure is too high as whole families depended on the only source of jobs in the town," commented president of a local workers' union, Mario Sanhueza.
