MAS Holdings has announced plans to cease garment manufacturing operations at its Methliya plant in Thulhiriya and repurpose the facility to expand fabric production, citing a prolonged contraction in global apparel demand.
In a communication to employees dated February 19, management said the Methliya premises—located within the MAS Fabric Park Thulhiriya—will be converted to strengthen knitting, dyeing and finishing capabilities. The company noted that the site is ideally suited for wet fabric processing due to its existing infrastructure and resources.
As part of the transition, garment production currently carried out at the Methliya facility will be redistributed among other MAS apparel manufacturing plants in Sri Lanka.
MAS confirmed that all 2,200 employees at the Methliya plant have been offered alternative employment, either at other local facilities or in Jordan. Staff who accept relocation will receive a three-month salary incentive.
Employees who choose not to accept alternative placements and opt to resign will be provided compensation exceeding statutory requirements under Sri Lankan labour law. In addition, MAS said all statutory dues will be settled in full, and wages will be paid through the end of April, including the April bonus.
The company stressed that the restructuring is being carried out in compliance with Sri Lankan labour regulations, with approvals obtained from relevant authorities, and that employees were engaged through a structured and transparent consultation process.
MAS attributed the move to sustained challenges in the global apparel industry, pointing to declining demand in key export markets such as the United States, the European Union and the United Kingdom. It said economic slowdowns, high inflation, tariff pressures and shifting global policies have reduced order volumes across major apparel-exporting countries including Vietnam, China, Bangladesh and Sri Lanka.
The group added that it has been reorganising operations to ensure long-term stability, noting the recent closure of facilities in Haiti and the Dominican Republic as part of broader restructuring efforts.
MAS said operations at its other facilities are continuing as normal, and that any future decisions regarding resizing local or overseas operations will be communicated directly to employees through official channels.
The company also cautioned that unverified information and speculation could undermine operational stability and customer confidence.
